Mori Building Buys Stake In SL Green's Next Trophy As Japan's U.S. CRE Interest Deepens

SL Green has landed a foreign investor as an equity partner to launch its latest new office project in Midtown Manhattan, sourcing the capital from a country that is demonstrating increased appetite for U.S. real estate assets.

Mori Building Co., a Tokyo-based “urban landscape developer,” acquired a 49% interest in 346 Madison Ave., where it will partner with New York City's largest office landlord to develop a trophy office tower as top-quality space gets harder to come by, especially around Grand Central Terminal.

The deal values the asset at $175M and marks Mori Building Co.'s first development project in New York. SL Green will act as development and leasing manager, according to a release.

“By uniting the expertise and networks of both SL Green, a driving force in shaping Manhattan's urban landscape, and Mori Building with its deep experience in large-scale urban development in Tokyo, we will create a new landmark that defines New York City,” Mori Building Co. President and CEO Shingo Tsuji said in a statement. 

SL Green acquired 346 Madison, formerly home to a flagship Brooks Brothers store, and an adjacent site last year for $160M. The KPF-designed tower would span 850K SF across 46 stories, featuring a landscaped terrace overlooking Madison Avenue and a two-floor amenity space that will include a 215-seat auditorium and a tenant-only padel court.

It's not the first SL Green property in which Mori has acquired a stake — it owns 14% of One Vanderbilt Ave., buying shares in the fully leased supertall in 2024 and 2025 at $4.7B valuations.

High-quality Manhattan office is chronically undersupplied, leading to firms renewing for large blocks of space years ahead of time. In Q1, Class-A office accounted for almost 72% of leasing, according to Colliers data, while Avison Young data shows that trophy office owners were uniformly able to charge three figures per square foot in rents in that period.

“Tenant demand for the highest-quality, best-located, and most thoughtfully designed buildings far exceeds available supply,” SL Green CEO and Chairman Marc Holliday said in a statement. “This is the perfect moment for SL Green and Mori Building to conceive and build the next great New York City office building.”

The deal comes as Japanese firms have stepped up their acquisitions of U.S. real estate assets, directing money to American properties as their economy slows. 

“We've seen an influx, at least in New York, of a lot of Japanese capital,” Craig Price, partner and transactional department co-chair for Belkin, Burden, Goldman LLP, said onstage Wednesday at Bisnow’s New York Investment and Lending Conference, held at the NYC Bar Association.

Japan was the second-biggest international investor in U.S. real estate in 2025, surpassing Sweden for the top spot behind Canada, according to MSCI data. Japanese investors put up $4B for U.S. real estate last year, representing a 23% increase from a year earlier.

In 2023, Mori Trust Co. — which split from Mori Building Co. in 1999 — made its first NYC investment when it bought a 49.9% equity stake in SL Green’s 245 Park Ave., valuing the 1.8M SF office tower at $2B.

Then, Japanese firms snapped up at least $2.1B of NYC real estate between 2024 and 2025, The Real Deal previously reported. During that period, apparel retailer Uniqlo acquired its flagship store, a 17K SF retail space at 666 Fifth Ave., for $350M. 

Several other companies invested in smaller residential buildings, including walk-ups in the outer boroughs, a divergent path from the way cross-border investors typically behave.

“One of the things that's interesting is the flight of the capital into the housing sector,” Canyon Partners Real Estate Managing Director and Head of Originations Jacob Feingold said onstage at Bisnow’s event.

In the 1980s and early 1990s, Japanese investors poured almost $300B into U.S. real estate assets like Rockefeller Center and California’s Pebble Beach Golf Club before the property bubble burst and firms were saddled with billions in losses. 

Those deals have left some “scar tissue,” Feingold said, resulting in greater interest in housing.

“To see that capital flow into now the residential space is exciting for us,” he said.

Japanese investment has also increased in other U.S. markets. Japanese developer and investor Daiwa House bought a stake in Alliance Residential Co. in late 2024. In December, Japanese trading and investment company Itochu Corp. bought a 19.5% stake in American multifamily developer Wood Partners. 

The momentum has continued this year. Sumitomo Forestry Co. — which dates back to 1691 — acquired Tri Pointe Homes for $4.5B in February.

Mori Building isn't the only firm getting directly involved in U.S. development. In March, Tokyo-based Kasumigaseki Capital paid $89M for for a Miami site entitled for a 53-story mixed-use tower that is part of a $6B, 27-acre master planned development in the city’s downtown.

Japan’s declining population as well as its government’s rising cost of borrowing and consequent higher interest rates are putting pressure on the country’s economy, Mitsui Fudosan America Vice President for Acquisitions Julius Goldman said onstage at Bisnow’s event.

That means Japanese companies that have generated significant cash aren’t seeing opportunities for significant returns on investment by deploying capital domestically, he said.

“[They] are looking for ways to diversify into other geographies, other asset classes and other sources of long-term yield and income,” Goldman said. “We can talk about all the volatility, and there's volatility in the United States as well, but overall, I think the U.S. remains one of the cleanest shirts in the hamper.”