Daily Archives: January 16, 2009

The rich feel your pain, sell mansions (or try to)

The Wall Street Journal reports that, as the result of the economic disaster, plus a shove or two from Bernie Madoff, the rich are trying to unload their mansions. It isn’t going so well.

“Some Bear Stearns stuff hit the market” in the fall, says Meredyth Hull Smith, of Sotheby’s, referring to the collapsed investment bank. London brokers say they’re also beginning to see financiers selling in the desirable Chelsea and Kensington areas.

It’s a stark reversal of fortune, particularly for financiers whose appetite for amenities like 24-hour concierge service and gated estates drove prices to dizzying heights. Now, many find themselves needing to downsize in an increasingly glutted high-end market, which is falling so rapidly brokers say it’s difficult to discern how listings should be priced. [emphasis added]

Of course, not every finance chief is selling a home because of the crisis. But all sellers are pitching their homes in a changed world. “It’s a terrible time to list right now,” says Wilbur Gonzalez, of Brown Harris Stevens.

Even in Greenwich, you can’t necesarily unload your stone and timber Neo-Georgian-Shingle-style-Victorian, or not at the price you’d like, anyway.

In early November, Scott Freidheim, former chief administrative officer at Lehman Brothers, put his just-purchased Greenwich, Conn., mansion up for sale for $13.75 million, according to Greenwich listing records. He and his wife bought it a year earlier for $12.4 million. The house is also for rent. The sale is tied to Mr. Freidheim’s relocation to Chicago, where he is now executive vice president of operating and support businesses at Sears Holdings Corp., says his real-estate agent, Joe Barbieri, of Sotheby’s International Realty.

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I have just one question

A Minnesota prostitute shacks up with a local millionaire, they do their thing for 20 years, he promises to always take care of her and sure enough, every quarter, continuing years after her john’s death, a check arrives from a Swiss Bank on a Madoff Securities account.

She moved into a new apartment, got a nice car, and like many associated with Madoff, gave away some of the money to charities and favored causes. She had a habit of reading the New York Times to keep track of the world she had intersected with in secret. Even after the man’s death a few years ago, the checks continued to arrive on schedule.

“Then one morning I pick up the Times, and there’s Bernie,” she recalls. “What’s he doing in the paper? I read the article and realized that my life was over.” Now she is struggling to find a way to survive, relying heavily on the generosity of friends. The check scheduled for the first week of January didn’t arrive, as she expected, and her car has been repossessed.

The Minneapolis Post, which reported this story, wants to know the name of the millionaire. I have a simpler question: this lady misses one check after 20 years and already is busted flat,living off the charity of friends and loses her car to the repo man, all in less than 19 days. That’s fast work from the car loan company and I suspect the bimbo hadn’t paying her bills for awhile, but what I want to know is, was there anyone involved with Madoff who wasn’t a complete financial imbecile? Noel can claim Alzheimers (for the same 20 years, I suppose)- what’s everyone else’s excuse?

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OwlGore doesn’t know whether to laugh or cry

Windmills – great, but what’s that those damn people are skating on? Haven’t they seen “A Simple Truth”? Asshats!

picture-3

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First the Somali pirates drown

Now the A-Rabs admit to losing $2.5 trillion in the busted economy. There is one God, and his name is Allah.

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UBS paying back investors for Madoff losses

But they’re under European supervision and subject to their laws. My guess is that Walt Noel’s Fairfield Greenwich Group is too, given the seeding of his sons-in-law throughout European capitals. Eventually, FGG will probably have to cough up at least its fees and, if that doesn’t bankrupt them, make repayment of losses too. First sign that this is about to happen? Watch for a yard sale at 175 Round Hill.

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Oh shut up!

School Board fires teacher for taping student’s mouth shut. Mollycoddlers!

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I hate to sound negative but …

It’s Pollyannish headlines like this one, generated by my industry, that drive me to it. I don’t want to join the mainstream media’s hysteria but now that The One will be running things they’ll go positive and I can throw cold water on their silliest claims, without shame. I look forward to it.

Greenwich commercial real estate just swell.

Despite economy, town commercial properties should hold their own

By Keysha Whitaker

 

STAMFORD – While the country may be heading into the worst segment of the recession, Greenwich commercial real estate probably won’t be as hard hit.

“Greenwich, historically, has always done well,” said Thomas O’Leary, senior director at Cushman & Wakefield of Connecticut Inc. “There are still people that want to be in Greenwich, especially as prices come down.”

On Tuesday, Cushman & Wakefield, a private commercial real estate services firm, released its year-end report for the Fairfield County commercial real estate market.

New office leasing activity for Class-A space in the region totaled approximately 1.8 million square feet (msf) in 2008, down from the nearly 3 msf leased in 2007, the lowest level since 2001, according to the report. Available direct Class-A space in Fairfield County jumped to 3.7 msf in the fourth quarter, up from 2.9 msf at the close of 2007.

So “holding their own” means new space leasing is off 40% and vacancies are up 27%. I’d hate to see what a bad market looks like.

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I think I see Chris Dodd in that rubber raft, too

from Dealbreaker.com

taxbank

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No honor among thieves but some get TARP $

Citicorp and Morgan Stanley fed their clients into UBP, then FGG and hence into Madoff’s maw. Why? I can’t guess, but this guy has a point.

Bloomberg reports that Citigroup and Morgan Stanley had $1.8 billion of client cash invested in Union Bancaire Privee, which in turn invested with Fairfield Greenwich, which of course was all Madoff.

With the billions these two firms manage, we’re not surprised that some of it ended up with Madoff, but even if there were no Ponzi, there’s still a scandal here: Investors are paying three levels of management fees. Citi, UBP, and Fairfield, and if Madoff had been a real manager, he would’ve charged real fees too, so that’s four levels.

Again, even if the end investor is totally legitimate, the clients of Citi and Morgan Stanley are getting royally hosed when their money is filtered through so many levels.

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It’s not your agent, it’s your price

A condominium at 351 Pemberwick Road sold yesterday for $735,000, 85% of its original asking price of $865,000. But the owner held onto the unit from August, 2006 until yesterday, changing agents three times and her price no more frequently. There’s really no need to go through this agony. And for those sellers who resist lowering their price out of the belief that “I’ll let someone make me an offer- I won’t bid against myself”, here’s a nice little object lesson in how a relatively small over-pricing kept bidders away for more than two years. When this unit finally dropped to $743,000, it found a buyer almost immediately. Couldn’t someone have offered 85% of the asking price way back then? Sure, but they didn’t.

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High end houses

I was out of the office much of the day today showing houses and it seems to me that there are still a lot of sellers who don’t understand what has happened to prices. They really should get out with their agent and look at houses priced below theirs. If the agent is careful in her selection, her seller will see better houses than his, for far less money, and even those aren’t selling.

I can’t help you with market conditions but I guarantee you that if you’re priced at $6.9 million and there is a better house – better design, better location, better grounds, asking $5.4, that owner’s will sell long before yours does.

The most egregious example of this is a new spec house that came on for $14 million when those agents who saw it thought $7.5 was its top price. Two years later, the builder still has it listed for $12 million which may be testimony to his deep pockets but not to his common sense. What I thought might be worth $7.5 in 2006 is probably worth less than $5 now. That’s got to hurt, if I’m right.

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Why are we bailing out these buffoons?

Citicorp Special Opportunity hedge fund will return 3 cents on the dollar to investors . I suppose they wanted to give real meaning to the term, “special opportunity”.

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Wall St. rents to fall 35%?

So says this prediction. That’s probably not good news for Greenwich landlords if they were using the lure of cheaper rent to attract financial service firms.

GE Capital is laying off 11,000 workers (worldwide). That’s not encouraging, either.

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Whetting your appetite (and knives)

Here’s the tax card information on Walter’s cottage at 175 Round Hill Road. I say $5.5 million as a distress sale. The town thinks more, but then, they appraised it before recent developments.

10-2149   NOEL WALTER M JR & MONICA H   ROUND HILL ROAD 0175   109

 

ADMINISTRATIVE INFORMATIONPARCEL NUMBER
 10-2149

Parent Parcel Number
 0

Property Address
 ROUND HILL ROAD 0175

Neighborhood
 162100   

Property Class
 109   Single Fam + Accessory Apt

TAXING DISTRICT INFORMATION

 Jurisdiction    57

 Area            1

 Corporation     57

 District        10

 Section & Plat  159

 Routing Number  7424E0023

Site Description

 Topography:      
 
 
 

 Public Utilities:
 Water:  Y
 Sewer:  N
 Electricity:  Y
 Gas:  
 Cable:  
 Well:  
 Septic:  
 Other:  
 Shared Well:  
 Shared Septic:  

 Street or Road:      
 
 

 Neghborhood:      
 

 Zoning:
 15   RA-2 Single Family 2 acre

 Legal Acres:
 2.19

 

  OWNERSHIPNOEL WALTER M JR & MONICA H

P.O. BOX 1555
GREENWICH, CT 6836

LOT NO 1B ROUND HILL RD E-23

CURRENT ASSESSMENT

Assessment Year   10/1/2005
Reason for Change   2005 Reval
VALUATION L 2963700
Market B 3038100
  O 0
  T 6001800
VALUATION L 2074590
70% Assessed/Use B 2126670
  O 0
  T 4201260

PREVIOUS ASSESSMENTS

Assessment Year   10/1/2004 10/1/2001 10/1/2001  
Reason for Change   2004 List 2001 Final 2001 Reval  
VALUATION L 1776100 1776100 1776100  
Market B 2138800 1873800 1758300  
  O 0 0 0  
  T 3914900 3649900 3534400  
VALUATION L 1243270 1243270 1243270  
70% Assessed/Use B 1497160 1311660 1230810  
  O 0 0 0  
  T 2740430 2554930 2474080  

 

Dwelling # 1

PHYSICAL CHARACTERISTICSStyle: Colonial
Year Built: 1947

Occupancy: Single family

Story Height: 2
Construction Type: Wood Frame
Finished Area: 8590
Attic: Part
Basement: 1/4 Bsmt, 1/2 Crawl

EXTERIOR
Covering: Stone 100%
       %

Condition: EX

ROOFING
Material: Slate or tile

INTERIOR ACCOMODATIONS
Finished Rooms: 18
Bedrooms: 8
Half Baths: 1
3 Fixture Full Baths: 7
4 Fixture Full Baths: 0
5 Fixture Full Baths: 2

HEATING AND AIR CONDITIONING
Heating Type: Hot water – gas
Air Conditioning; Y

OTHER
Res Pool In Ground
FSP
Fence Masonry
Fence Masonry

 

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Lazard values Madoff’s firm at $10 million

There are those who are skeptical that such a besmirched brand could sell for anything close to that. I’m one of them. So if Bernie’s is worth next to nothing (we’re speaking of the Madoff trading venture mishandled by the Madoff boys, not Bernie’s personal Ponzi scheme, which wasn’t supposed to exist), how much will Walter Noel’s FGG draw at its own bankruptcy sale? Depends what used mahogany desks and office iceboxes go for these days, I suppose.

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FGG is shutting down! No it’s not! yes it is!

Conflicting stories about whether or not Walter Noel’s Fairfield Greenwich Group is shutting its doors. Depending on whom you talk to, they’re either still open for business or packing away their pencils. It’s academic, really, because it’s a “when” not “if” question. Even if there were a single investor left in the world willing to entrust his savings to a group that lost $7.5 billion to a Ponzi scheme like Madoff’s, the wave of law suits washing towards FGG will bankrupt it and its principals – the latter group would include Walter, by the way. My only question: how soon before 175 Round Hill Road goes up for sale? Even at fire-sale pricing, it should fetch at least $5.5 million and I have a buyer who might like it.

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Old Greenwich property values

Shoreham Club Road

Shoreham Club Road

This house sold for $2.350 in 2005 ands now it’s back again, untouched so far as I can tell, for $2.750. The seller must be in a different market than the one I’m seeing.

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Is Conyers farm land still appreciating?

According to the owner of 2 Conyers farm, yes, and at a rapid pace. He bought this carriage house an 10 acres in a bidding war in 2005 for $4.050 million. He proceeded to complete renovate the carriage house but never built the main house envisioned for those ten acres and now offers the place for $7.995 million. I’m sure some substantial money was spent fixing up that cottage but I don’t believe it amounted to $4 million. It will be interesting to see what happens to this place.

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Most houses aren’t really for sale

I mentioned this yesterday but today I saw that 180 Round Hill Road has expired unsold yet again and so I bring it back up for discussion. The owners of this property have been trying to sell it since 2001. First at $3.795 (expired 2002) then at $5.250, beginning in 2005. It expired Today at its last asking price of $3.795. One day, they may actually decide that they want to move.

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2005: $1,230,000. 2009: $1.175 (ask)

77 Valleywood Road

77 Valleywood Road

Valleywood Road has always been a popular street for young families. I’d think that the failure of this house to sell must be due, at least in part, to a dearth of young families entering the Greenwich housing market these days. Statistics are always useful to gauge the overall state of the market but concrete examples are useful, too.

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