Latest / The CEO Diary with Fexingo: Leadership Lessons, Executive Decisions, and Corner Office Stories / How Akira Mori Transformed a Regional Developer into a Global Real Estate Giant
Transcript
- Lucas: Imagine you're trying to build a massive mixed-use development in the middle of one of the world's most expensive cities. You need to assemble dozens of separate parcels of land, each owned by a different family or small business. The entire project takes nearly two decades from conception to completion. That's the story of Roppongi Hills and the man behind it, Akira Mori. Luna: Akira Mori — I know him as the chairman of Mori Building, but most people outside of Japan have never heard of him. And Roppongi Hills is enormous, like a vertical city within Tokyo. Lucas: Exactly. It's one of the most ambitious urban regeneration projects in modern history. When it opened in 2003, it had 800,000 square meters of floor space, office towers, luxury residences, a hotel, an observation deck, a museum, and about 200 shops and restaurants. But the story starts long before that — in the 1980s, when Mori began quietly buying land in a then-unfashionable part of Tokyo. Luna: And this is the part I find fascinating — because everyone remembers Japan's real estate bubble of the late 1980s. Land prices in Tokyo were astronomical. How did he even begin? Lucas: If today was actually useful to you, the way these stay ad-free is listener support — buy me a coffee dot com slash fexingo. It's how we keep the conversation going without any ads. Luna: Yeah, and it really does help. We're a small team, and every bit of support lets us dig into more stories like this one. Lucas: So back to Mori. He started with a very different premise than most developers. His father founded Mori Building in 1959, and the company was known for owning and managing its properties, not flipping them. Akira took that long-term philosophy and applied it to a scale nobody had attempted. Luna: Right, so the family business was already about holding assets for decades. But Roppongi Hills wasn't just a bigger building — it was a complete rethinking of a neighborhood. Lucas: Precisely. Mori believed that cities should be vertical — that you could bring work, living, and leisure together in one tower to reduce commuting and create more vibrant communities. That's now common in many cities, but in the 1980s in Tokyo, it was radical. The problem was the land. Roppongi was a jumble of small houses, bars, and narrow streets. He needed to consolidate about 400 separate parcels. Luna: 400 separate owners? How do you even start that conversation? Lucas: Very slowly, and very patiently. Mori and his team began meeting with landowners one by one. Some families had lived there for generations. Others ran small businesses. The approach was to offer them a stake in the new development or cash, but always with a long-term vision. He'd show them models and plans, and explain how their property would become part of something much bigger. Luna: I've read that the negotiation process took over a decade. That's an incredible amount of trust-building. Lucas: It did. The first land acquisition was in 1986, and the last was around 2000. Meanwhile, Japan's real estate bubble burst in 1991. Land values crashed. Many developers went bankrupt. But Mori Building had the balance sheet to hold on because they weren't leveraged to the hilt. They could wait. Luna: That's the patient capital advantage. Most developers would have panicked and sold off the land. But Mori kept buying during the bust, which probably made the later acquisitions cheaper. Lucas: Exactly. And he also had a clear vision for what the final product would be. He wasn't just assembling land to sell it later. He wanted to create a place that would stand for a century. That meant investing in infrastructure, public space, and design. He hired some of the world's best architects — Cesar Pelli, Kengo Kuma, Terence Conran. Luna: And he made sure the development had a cultural anchor — the Mori Art Museum on the 53rd floor. That was a deliberate choice to attract a certain kind of tenant and visitor. Lucas: Absolutely. The museum was a loss leader. It doesn't make money, but it drives foot traffic and gives the entire complex a brand. Mori said he wanted Roppongi Hills to be 'a place where culture and creativity flourish.' And it worked. The office tower now houses companies like Google, Goldman Sachs, and Bain & Company. The residential units are among the most expensive in Tokyo. Luna: What's striking to me is that this happened in Japan, a country often seen as resistant to large-scale change. How did he navigate the regulatory and political hurdles? Lucas: He worked closely with the Tokyo metropolitan government. The project was designated as an urban redevelopment project under a special law that allowed for more flexible zoning. But even then, he had to get buy-in from 22 different government agencies. Mori was known for his persistence — he'd attend every public hearing, write personal letters to officials, and never take no for an answer. Luna: Was there a point when the project almost failed? Lucas: Several. The most critical came in the late 1990s, during the Asian financial crisis. The cost of the project had ballooned to about 500 billion yen — around 4 billion dollars at the time. Mori Building had to raise additional financing, and banks were nervous. He personally guaranteed some of the debt. It was a massive bet on his part. Luna: And it paid off. Roppongi Hills opened in 2003 and was an immediate success. But I'm curious about the man himself. What was his leadership style like? Lucas: Mori was known as a very hands-on CEO. He would walk the construction site every week, wearing a hard hat, talking to workers. He insisted on quality in every detail — from the type of stone used in the plaza to the way the elevators sounded. He once rejected a batch of tiles because the color wasn't exactly right. That level of obsession is rare. Luna: It reminds me of Steve Jobs, but in a very different industry. The attention to the user experience, even if the user never consciously notices. Lucas: Exactly. And like Jobs, Mori was also known for his long-term thinking. He often said he was building for his grandchildren, not for the next quarterly report. That's a cliché, but he actually lived it. Mori Building still owns 100% of Roppongi Hills. They didn't sell any of it off. The rental income from that single project is massive. Luna: So what's the lesson for leaders today? In a world obsessed with short-term metrics, how do you maintain that kind of patience? Lucas: I think the lesson is twofold. First, you need a capital structure that allows you to wait. If you're under pressure from investors to deliver returns every year, you can't do a 20-year project. Mori Building is a private company, and that gave them flexibility. Second, you need a vision that's compelling enough to attract talent and partners even when the payoff is decades away. Luna: And that vision has to be more than just making money. It has to be about creating something lasting. Mori's vision was about improving the city itself. Lucas: Right. He famously said, 'A city is not a machine. It is a living organism.' And he treated it that way. Since Roppongi Hills, Mori Building has gone on to develop other large projects — the Toranomon Hills complex, the Azabudai Hills project — all following the same model of patient land assembly and mixed-use design. The company's total assets are now worth over 2 trillion yen. Luna: That's about 15 billion dollars. And Akira Mori is now in his 90s, but he's still involved. I believe his son is taking over day-to-day operations. Lucas: Yes, his son Shingo Mori is the current president. But the philosophy remains. The company still doesn't sell its properties. They develop, own, and manage. It's a genuinely different business model from most Western developers. Luna: I think that's the part that sticks with me — the idea that you can succeed by being patient, by being obsessive about quality, and by thinking about your legacy. It's almost countercultural in today's business environment. Lucas: And that's exactly why it's worth studying. Akira Mori didn't invent any new technology. He didn't disrupt an industry. He just did something very difficult very well, over a very long time. That's a rare kind of leadership. Luna: So what's next for Mori Building? Are they eyeing projects outside Japan? Lucas: They've done some small projects in Shanghai and Singapore, but the core focus remains Tokyo. There's still a lot of aging infrastructure in the city that could be redeveloped. The Azabudai Hills project, which completed just a few years ago, involved redeveloping a former government housing complex. It's another 20-year saga. So the model is still working. Luna: It makes you wonder — what other cities could benefit from that kind of patient, visionary development? Lucas: That's the question, isn't it? Because the world is full of cities that need regeneration, but the financial and political systems often don't reward patience. Maybe the real lesson from Akira Mori is that sometimes you have to build the system that allows you to do the work, rather than fighting against the existing one. Luna: That's a powerful note to end on. Thanks for the deep dive, Lucas. Lucas: Thanks, Luna. And to our listeners — if you're ever in Tokyo, go stand at the base of Roppongi Hills and look up. That building took 20 years of someone's life. It's worth appreciating.