Options for Income caught my attention the most because he said you can make $65,000.00 additional every year just by following his recommendations. Its worth noting that when a company makes a large, complete relocation like this, they still follow a similar decision making process to other firms doing a similar move within more prime CBDs (showing preference to buildings that are larger in total area, have larger floor plates, are of relatively recent vintage/not old, that offer multiple services and amenities on site or adjacent and are connected to or are a very short walk to trains and subways.I have been seeing advertisements for Jim Fink’s Options for Income as well as some of his other products for some time. In the Rakuten case (their building completed construction in 2015), Futakotamaga is a natural back office location for access to Shibuya. If your office is in Shinagawa, a back office is likely going to be in the vicinity of Kawasaki, Higashi Shinagawa, Tennozu and Odaiba. It is also worth noting that each prime Tokyo CBD has its logical complimentary back office district. JIM FINK INVESTING 2017 PCIn the past for instance, the PC makers effectively played a game of “locational leap frog” to save fixed costs where Manufacturer A moved to a lower cost location inside the Yamanote line, then Manufacturer B moved to Kawasaki causing Manufacturer C set up in Yokohama. There are reasons that companies relocate entirely to what can be labeled as back office or suburban location. Only firms who have a large amount of staff that do not need to be physically conducting business in central Tokyo or those who are most cost sensitive can put all staff in this type of location. Graphs and Visuals: Average size of large buildings, CBD convergence map Photos: Header - Toranomon Hills from Shiodome However, they will also find more direct competition from areas that were formerly so separate and distinct as to be considered incomparable in terms of rent and prestige. CBD consolidation will continue to level the playing field in the central five-wards while further increasing the dominance of larger landlords and their REITs. These trends are already well established and will become obvious as large stock continues to be built in central areas. Today there is a discernable skyline that will only become more prominent. Larger developers will control an increasing share of the core Tokyo office market over time. This will be especially true of older, smaller or less conveniently located buildings.Īs recently as the early 2000s, Tokyo was a fairly nondescript sprawl. As the intensity of development continues to be felt in these areas, remote or minor locations will see a greater amount of office stock become redundant and be repurposed for residential, retail, hotel or other uses. Over the long-term, these macro CBDs will compete more directly with one another and overlap to an extent that is not well understood in the market. Macro CBDs - Everything That Rises Must Converge Another likely candidate for a massive consolidation are the various office districts on either side of Tokyo station that will come to be seen as a “Greater Marunouchi”. For instance, an area encompassing Toranomon, Kasumigaseki, Kamiyacho, Roppongi, Atago, Akasaka, Akasaka Mitsuke and Nogizaka will coalesce into a “Greater Toronomon” CBD. What were previously separate CBD areas begin to converge in to macro districts. While the projected 13,600 tsubo/building average for 2016 - 2020 will likely decline, the final figure will surely be larger that all prior periods.Īs large buildings are built around new and existing stations and lines, the relative distance between CBDs (central business districts) begins to blur. Using a net office lease area of approximately 10,000 sm or 3,000 tsubo as a “large building”, the average building size has increased from 8,200 to 10,600 tsubo in the 1985 - 2015 period. This outlier is the five-year period from 2006 when land values and rents peaked and developers rushed product to market. The trend offers only one exception since the end of the bubble during what was arguably a “mini bubble” itself. In the pursuit of highest-and-best-use and competiveness, the focus has been towards constructing progressively larger buildings. The bubble mantra of favoring office developments of even very small scale in isolated locations over residential, logistic and hotel ended long ago. Onward and Upward - The Bigger the Better
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