New Japanese investment in U.S. real estate surged 40 percent in 1987 to an estimated $6.8 billion, compared with $4.8 billion in 1986, despite a rise in interest rates during the first three quarters of the year, according to a study by Salomon Brothers.

The study showed that Japanese acquisitions for 1988 are expected to total $7 billion to $10 billion. Three factors are expected to spur buyers: the historically low U.S. dollar, which makes U.S. real estate seem inexpensive to Japanese investors; Japan's exceptionally high real estate prices, which provide a powerful funding base for even small landowners; and the surplus of Japanese investment money.

The study also showed that about two-thirds of Japanese acquisitions were made by a few large real estate, life insurance and construction companies, and that investment has been concentrated geographically, with 64 percent occurring in Manhattan, the Los Angeles region and the Hawaiian islands.

Japanese investors are expected to broaden their base in the United States in the next year, according to the study. Japanese investors already have bought several downtown office buildings here in the last two years.

Some Japanese investors are looking beyond their traditional focus on downtown office markets to suburban areas and at other cities, including Boston, Chicago, Philadelphia, Atlanta, San Diego and Seattle.

Miller and Smith Inc., a McLean-based builder and developer, has paid First Federal Savings of Arkansas more than $14 million for the bank's 151 town house lots and partially completed homes at Hillandale, the luxury residential development in Georgetown.

The bank had assumed control of the project after foreclosing on the project's original developer. Kettler Brothers Inc. of Gaithersburg has since been designing, building and selling the homes for First Federal and now will continue to do so for Miller and Smith.

Gordon Smith, president of the development firm, said First Federal sold the property because it "just wanted to leave the area."

Smith said, however, that First Federal still owns 26 lots slated for construction of single-family detached homes at Hillandale. He said Miller and Smith and Kettler are developing homes on those lots in a joint venture, with funding from Providence Savings & Loan, a subsidiary of Miller and Smith. The Arkansas bank also still owns the one-time Archbold mansion on the hilltop at Hillandale, where a plan to divide the house into condominiums has been proposed.

IN THE BUSINESS ... The number of condominium and cooperative sales hit a record high in 1987 with 365,000 units sold, an increase of nearly 10 percent over 1986 levels, a study by the National Association of Realtors showed. More than half of all condominium and co-op sales nationwide last year were in the Northeast, where the number of sales rose 15 percent above 1986 levels, the association said ... The number of new building contracts in the Washington metropolitan area was down significantly in January compared with the number of new contracts in January 1987, according to a report issued by the F.W. Dodge division of McGraw-Hill Information Systems Co. The dollar volume of new contracts in January totaled $353.3 million, down 37 percent from $564.4 million in January 1987. Nonresidential construction fell 46 percent, to $136 million in January 1988 from $253 million in January 1987. Residential building fell 30 percent, to $217.2 million in January 1988 from $311.4 million in January 1987 ... The Kaempfer Co. has completed the first phase of its new building at 1201 New York Ave. NW and has 20 percent of the 300,000 square feet of office space leased. The second phase, a 110,000-square-foot adjacent office building, is scheduled for completion in spring 1989 ... Chase Home Mortgage Corp. has introduced a 30-year mortgage that works as a low, fixed-rate loan for the first seven years and then automatically converts to a one-year adjustable mortgage at prevailing market rates with a 2 percent annual cap and 6 percent lifetime cap. The new mortgage has no negative amortization ... Washington's historic Union Station will be reopened Sept. 28 with a gala hosted by the National Trust for Historic Preservation. The station is undergoing a $150 million restoration that will convert the 1907 Beaux Arts structure back into a train station and also a shopping mall, with 100 stores, five major restaurants and a nine-theater cinema.

PERSONNEL FILE ... John F. Elder, executive vice president of Perpetual Mortgage Co., has been elected president of the Mortgage Bankers Association of Metropolitan Washington. ... John W. Harshaw has been named president of the American League of Financial Institutions, a group representing the nation's minority-owned and operated savings institutions ... The architecture and engineering firm of Perkins & Will has named Timothy K. Smith vice president for architectural design, project management and business development and Jon C. Nathanson vice president and director of interiors ... Howard W. Mersky has been appointed executive vice president and David Sisson senior vice president of Combined Properties Inc., a developer of off-price shopping centers ... Poretsky Building Group has appointed George A. Ludwig Jr. executive vice president and Paula Goldberg vice president of land acquisition ... R.E. "Nip" Nippard has been named senior vice president and director of production for Fairfax Mortgage Corp ... Richard W. Allen has been named executive director of Suburban Maryland Fair Housing Inc., a private nonprofit fair-housing organization ... David M. McDonough has been named vice president of NHP Real Estate Corp., a wholly owned subsidiary of the National Corporation for Housing Partnerships.