Out-of-towners getting cozy.

One of the most competitive and high-priced real estate markets in the world, New York City isn't exactly a place friendly to outsiders looking to break into to its tight circle of successful real estate investors. You wouldn't necessarily think that looking at Denver based REIT, Archstone-Smith, however.

The firm has become the largest public owner of apartments in Manhattan, a distinction it shows no sign of relinquishing given its busy pace of acquisitions--it just acquired two high-rise apartment buildings in New York City the 270-unit, 35-story apartment building the Marlborough House, at 235 E. 40th St. in Manhattan, which they bought for $165 million, and 180 Montague St., a 192-unit, 33-story building in Brooklyn Heights. which cost them $101 million.

So how did the firm chart such a dramatic rise? After all, in 2003, the portfolio of the $15 billion REIT contained a single measly asset in NYC. It now has an amazing 3,745 units, worth $1.8 billion.

"Sometimes an out-of-towner has a different way of looking at things that can turn mediocrity into success," said James Dunlop, a senior vice president at Archstone-Smith while speaking at a recent Young Mortgage Bankers Association (YMBA) luncheon.

Dunlop attributes the company's fast success from afar to the fact that they "have local people in [their] umbrella, executing [their] strategy every day."

The company has brought in people to work for them in all areas, including acquisition and construction. Rather than just leaping into the market, the company intelligently began by taking small steps, first getting to know the major players in Manhattan, then getting involved in joint ventures, working their way up to their own ventures and developments.

Noting that "customer focus on the resident doesn't always exist in New York." Archstone-Smith decided to make themselves more accessible to New Yorkers by keeping their sales offices open seven days a week.

"Anyone can walk in off the street at any time and rent something instantly," Dunlop said.

Mitsui Fudosan , whose director Mark Meier also spoke at the luncheon, clearly is hoping to emulate Archstone-Smith's success.

The firm, which is one of the Japan's largest real estate investors, experienced much success in buying up city properties during a wave of Japanese investment in Manhattan real estate investment in the late 1980s. When the Japanese economy faltered in the early 1990s, however, many Japanese firms, Mitsui Fudosan included, were compelled to sell much of their portfolios. Mitsui Fudosan wound up holding only 1251 Avenue of the Americas.

Inspired perhaps by indications that the Japanese Postal Service, considered the largest holder of personal savings in the world, will be potentially dedicating portions of its funds for investment, the firm has announced its return to the US market.

If it follows Archstone-Smith's footsteps, it could again provide an impressive channel for Japanese investment in the city.