[framed_video column=”half”]http://www.youtube.com/watch?v=eR1AulRsctg&list=PLf5PNQ3Ifhl-PEfHrdHiqzuxnZOcI7cxe[/framed_video] View more of my Virtual Tours at my YouTube Page.
Location: Beverly Hills, Calif.
The Skinny: No one will ever mistake the 1970s for the Golden Age of Los Angeles residential architecture, as the exterior of this Beverly Hills Post Office home—with its dun-colored stucco and graceless lines—makes clear. It’s a different story with the redone interior as drab gives way to sleek, if all-too-typical, modern design tropes: Buddha statue? Check. Indoor telescope? Yep. Billiard table with off-white felt? Most definitely (just don’t set your wine glass on the edge while you’re lining up your shot). Not that it’s bad, necessarily, just familiar. The spilt-level floor plan has an interesting flow, the kitchen and bathroom fixtures are by Boffi, and the screening room looks like a really comfortable place to watch…Oblivion? There are five bedrooms and five baths, and the huge master suite opens out onto a spacious outdoor entertainment area with a pool, fire pit, and yes, a lanai complete with bed. All in all, not bad if you can get past the stucco and meet the asking price of $5.25M.
Tuesday, September 3, 2013, by Eve Bachrach
Listed for: $29.5 million
Listed on: February 6, 2013
Sold for: $28.8 million
Size: The 13-acre property has a three-bedroom, 7,500-square-foot main house plus guesthouse.
Location: 1050 Moraga Avenue, Bel Air
The Lowdown: Rupert Murdoch finally closed on the Moraga Vineyards and Winery, the huge Bel Air estate once owned by Wizard of Oz director Victor Fleming. Now a commercial winery, the the property also includes a wine cave (with an inventory worth $4 million), office building, and a whole lotta grapes. Moraga released its first wines in 1992, and Murdoch reportedly plans to keep the business going. Oddly enough, this isn’t the only vineyard with an old Hollywood connection on our list this week.
Listed for: $10.95 million
Listed on: May 3, 2012
Sold for: $8.25 million
Size: 7,500-square-foot house with six bedrooms and six and a half bathrooms on 2.2 acres.
Location: 1501 Umeo Drive, Pacific Palisades
The Lowdown: Built in 1956 (and massively made-over since then), this estate once belonged to Douglas Fairbanks Jr. It has a new guest house, dining pavilion, “billiard room, poolside sun bathing deck, bocce court, card room, temperature controlled wine room, outdoor dining arbor, citrus and olive groves, vegetable gardens plus a vineyard planted with 1000 vines ready for the 2013 harvest.”
Listed for: $7.8 million
Listed on: March 5, 2013
Sold for: $7.14 million
Size: 3,400-square-foot house with four bedrooms and four and a half bathrooms.
Location: 26524 Latigo Shore Drive, Malibu
The Lowdown: This open-plan, many-windowed Malibu house has everything you need for a summer weekend: 61 feet of beach frontage, tons of parking, three fireplaces, an ocean-front spa, game room, and a bar on every floor. Lucky for the new owner that LA summers don’t actually end in August.
Is it time to buy international real estate? Well, if you’re loaded with money and are looking for your fourth home in an exotic locale, then what’s to lose? For institutional and retail investors, the answer to that question depends on two things: risk tolerance and patience.
It’s time, yes, because prices of risk assets — like emerging market home builders and Mexican REITs — are cheaper than they’ve been since the financial crisis in 2008. But if volatility and uncertainty aren’t your thing, then stay away.
Over the next few months, investment managers are reallocating their assets, most of it away from risk. They are expecting the Federal Reserve to slowly unwind its bond buying program and eventually put an end to quantitative easing. Professionals in the market are trying to time that policy shift correctly. No one wants to be holding a QE-friendly bag of goods in a post-QE world.
“This is a very difficult environment for an emerging markets fund manager,” says Joel Wells, portfolio manager at the Alpine Emerging Markets Real Estate Fund (AEMEX).
Wells’ fund is down around 6% year-to-date, which is better than the MSCI Emerging Markets Index, down 13.06% YTD.
He’s in markets where — for the moment, anyway — few have dared to tread.
The China ‘Bubble’
Take China, for instance. The government has been poking holes in its own style of housing bubble. Truth be told, the housing market in China is nothing like it is here in the United States. Most buyers are not leveraged to the hilt with mortgage and consumer debts. They have to put at least 20% down (compared to zero money down pre-2008 housing crisis in the U.S.). Most buyers pay for second homes in cash. There’s no foreclosure crisis on the horizon. There’s no derivatives market of mortgage backed securities waiting to pull the rug out from under China banks.
That doesn’t matter. The market is mostly wary about China lenders who got carried away with their borrowers in a few choice sectors. Autos for one. Housing is another. At the start of the summer, Beijing cracked down on those smaller municipal lenders. The market panicked. Money market rates skyrocketed. Developers got weak in the knees.
“There are probably at least 30,000 home builders in China. That’s just too much. What’s happening now is that China real estate is becoming less of a macro story and so you have to take a bottom’s up approach to the market now,” says Wells. “We have a sense of a policy shift coming from the new leadership. We’ve now gotten away from constantly being on the look-out for new policies to curb housing growth. We’re looking for companies that can steal market share, companies that have strong balance sheets.”
Wells likes Shimao Property Holdings (HKG: 0813), a large cap developer operating nationwide. Net profit margins were up 22.9% last year. Shares are up 23.02% YTD. Another favorite is China Resources Land Ltd. (HKG: 1109). The company bid 10.9 billion yuan last week ($1.8 billion) and won the rights to build a commercial site at a $45 billion financial center in Shenzhen. That stock is up nearly 5% YTD. Both are beating the MSCI China index, which is down 9.13%.
Over the last several weeks, housing values in China have been on the rise. Foreign investors in this space were wise to buy the names that have government backing, are getting awarded big state contracts, and have a lower cost of capital. By comparison, the smaller muni firms do not have access to cheaper credit. When they tap the bond market for funding, they’re looking at average interest rates ranging from 8% to 12%. The bigger firms are paying in the 3% to 4% range.
Right now, investors in Chinese real estate are chasing rich Chinese home buyers. Affluent Chinese view real estate as a long term asset. Savings accounts don’t pay there, either. And equity markets are too volatile. Bond markets are too thin, and the secondary bond market is in its nascent stages. There’s nowhere else for them to invest. Macao casino games notwithstanding, of course.
Brazil, The Other Bubble
Anyone who watches the Brazil housing market has seen that higher housing prices have been completely disconnected from the major home builders. Their stocks are all down. Housing values are all up.
“I think this is more market driven than the fault of the home builders themselves,” cautions Wells. ”The Brazilian home builders grew way too fast.”
Some of that ballooning growth a year or two ago was their own wishful thinking. But they had a reason to be hopeful. The government was spending billions on a low to moderate income housing program, providing buyers and builders with subsidized loans to build new properties. The problem was that many companies got carried away, went on an acquisition binge and could not deliver on their promise to build housing units. If company X said they’d deliver 100 units in the first quarter, it was more common that they delivered less than half that, or none at all. Some deliveries are over a year late currently.
“I don’t want to tar every company with this brush, some stuck to their knitting and continued to do well,” says Wells. “But others got into big problems and some discovered those problems earlier than others. There is a lot of differentiation between the players in Brazil, and elsewhere in emerging real estate, than you’ve ever had before.”
His favorites in Brazil are the localized mid caps, like Helbor. The stock’s down 21% since it paid out its huge dividend of R$0.52 (about $0.22) per share on April 22. It was down another 2% on Tuesday mid-afternoon as investors continue to pile out of Brazilian equities.
EVEN Construtora is another one. The São Paulo developer is down 15.11% YTD. EZTEC Home Builders is his best pick so far, up over 6%.
“These three have all done well throughout this downturn. They are still well-positioned to host strong profits and return cash in the short term,” he says. Cash is king in this business and they are ahead of the curve in that respect.
The bigger players like Gafisa, PGD Realty and MRV are working out the kinks in their own foiled M&A deals. Each one is in different shape, some worse than others.
For international real estate investors, differentiation is the key. And that is going to require on-the-ground expertise, and digging through the financials to get a sense of who is worth buying on the dips. The dips are going to keep coming until the market has a better sense of where the Fed is going with QE.
“We have to be much more bottom up,” says Wells. “In a way we like that because we are real estate investors after all, and this is a time for us to show that differentiation in company fundamentals will ultimately drive long term returns. It is going to be a bumpy next couple months. Markets hate uncertainty. We have uncertainty around Fed tapering and we have uncertainty about the emerging market growth model. Once we get through this period of volatility, will pay off.”
Jodie Foster is a member of a very special group of performers. This special group is known as, “Child Stars Who Actually Grew Up To Be Healthy Adults”. A child star who managed to make it through adolescence without too many hiccups, she went on to graduate from Yale University, and has enjoyed a very successful career, both as an actor and a director. By all accounts, her years at Yale were the most difficult. This was not because of her schedule or the academic work, but because multiple crazed fans had easy access to her on an open college campus. The most “famous” of these fans, John Hinckley, Jr., stalked her while she was a student, and ultimately attempted to assassinate then-President Ronald Reagan in order to impress her. After finishing college, she was uncertain if she would continue acting, but she finally chose to continue. This was a smart decision on her part, as she has gone on to win two Academy Awards, two Golden Globes, a BAFTA, a SAG Award, and this past year, she was awarded the Cecil B. Demille Award at the Golden Globes. The child star who earned her first Academy Award nomination when she was thirteen, has gone on to become one of Hollywood’s most consistently bankable female stars. She is next slated to appear in the highly-anticipated new feature from Neil Blonkamp, “Elysium”, and she has both television and film directing gigs lined up this year. Apparently, the secret to being a well-adjusted child star, is doing what you love, and doing it well, for the rest of your life. She owns multiple properties around California, and she recently put one of her homes in Los Angeles on the market.
Jodie Foster’s house is 6,060 square feet and contains 4 bedrooms, 4 full bathrooms, and 2 half-baths. Located in the Hollywood Hills, the beautiful Spanish-style mansion also boasts an attached one bedroom guest suite. Jodie Foster’s house features high ceilings, hardwood floors, and lots of sunlight. There is a sunken living room with a cathedral ceiling, a state-of-the-art kitchen with a Butler’s pantry, an office suite, a screening room, and very well-appointed master suite. Outside of Jodie Foster’s house, there is a pool, a large patio, and lots of greenery. She is asking $6.399 million for the property, which is surprisingly reasonable for the area. Odds are, it will sell quickly. There are probably a lot of people who would love to say they live in Jodie Foster’s former home.
Jodie Foster is flying the celebrity coop that is the distinguished neighborhood known as Bird Streets. The acclaimed actress, director and producer has decided to part ways with her Spanish-style home in the affluent Hollywood Hillscove, listing the property for a cool $6.399 million. Foster originally purchased the intimate hacienda in 1997 and went about remodeling parts of the property. However, the 1935 villa retains much of its original charm, with beautiful beamed ceilings, brick-lined courtyards and other rustic details. Accessed via a private, gated driveway in the rear, the home sits shaded in mature foliage and a “high-reaching hedge for utmost discretion.” The home itself offers four bedrooms, five baths and roughly 6,060 square feet, and it has amenities ranging from a screening room to a chef’s kitchen to a master suite with a private sitting area.
Alyssa Abkowitz looks at this week’s Private Properties: Jodie Foster lists her home in West Hollywood for $6.4 million; a piece of George Washington’s Mount Vernon asks $25 million; a Pebble Beach house designed by Cesar Pelli lists for $12.8 million; and on the market for $74 million, a Palm Beach mansion sells for $42 million. Photo: Hilton & Hyland.
Academy Award-winning actress Jodie Foster has listed her home in Hollywood Hills West for $6.399 million.
The Spanish-style house, built in 1935, features a step-down living room with a cathedral ceiling, a screening room, a study, a courtyard swimming pool, five bedrooms, six bathrooms and 6,060 square feet of living space.
Foster, 50, gained recognition for her starring role in “Taxi Driver” (1978) at age 13. She won Oscarsfor “The Accused” (1989) and “The Silence of the Lambs” (1991). More recently she starred in the 2011 films “Carnage” and “The Beaver.”
David Kramer and Jeffrey Hyland of Hilton & Hyland, an affiliate of Christie’s International Real Estate, are the listing agents.
Actress Jodie Foster is trying to shed some real estate skin with the listing of her longtime Los Angeles home. Foster just listed her Hollywood Hills property for $6.399 million, reports the Los Angeles Times.
The 1935 Spanish Villa has four bedrooms, four bathrooms and two half-baths. It spans about 6,000 square feet of living space and surrounds the property’s central courtyard. The grounds span about .29 acres of land and also include a pool, spa and detached guest house.
Inside the main home, there are cathedral ceilings, a gourmet kitchen and a massive screening room. And because this is a celebrity property, the entrance is discrete and gated. The official listing calls the home a “refuge” for homeowners who want “the ultimate in privacy, security and style.”
Foster first bought the home in 1997 and updated part of it, reports the Wall Street Journal. Before Foster, model/actress Cheryl Tiegs owned it.
In “Elysium,” her latest movie, actress Jodie Foster plays a a character who represents the richest .01 percent of society. The futuristic film depicts Earth as a vast wasteland and people like Foster’s character live up in the sky, safely ensconced in a luxury space station called Elysium.
Foster, 50, has been acting since she was three years old and has a respected career as a director and producer as well. Her films “The Silence Of The Lambs” (1991) and “The Accused” (1998) have landed her two Oscar awards for Best Actress.
After the mortgage meltdown and the plunge in homeprices, record numbers of ordinary houses tumbled intoforeclosure across Southern California as borrowers became unable or unwilling to pay their mortgages. But the rich aren’t so different after all: Million-dollar-plushomes have reverted to lender ownership in increasing numbers — previous sales prices, prime locations and even celebrity pedigrees have provided no immunity.
Earlier this year, Oscar-winning actor Nicolas Cage’s English Tudor joined the foreclosure fraternity. The nearly12,000-square-foot house, once marketed at $35 million,now is listed for $11.8 million; the seller, Citibank.
The Bel-Air mansion wasn’t even the most expensive lender-owned property — known in the industry asREO, or real estate owned — in Los Angeles County, according to a records search of houses on theMultiple Listing Service in the county’s most posh ZIP Codes.
Higher priced still was the alleged Wells Fargo party house, which was listed nearly a year ago at $21.5million and sold this month for $14.95 million. The beachfront house in gated Malibu Colony became thecenter of controversy when neighbors complained that it was being used by a Wells Fargo & Co.executive for social events; the executive was subsequently ﬁred.
Although the pace of foreclosures has slowed in the general housing market in Southern California andmuch of the nation, it’s still rising for upper-tier homes.
The number of homes in the $1-million-and-up slice of the market that have become bank owned hastripled in the second quarter compared with the same period three years earlier in Los Angeles County,which has the majority of Southern California’s high-priced REO houses. And the trend has shown littlesign of slowing, according to data from ForeclosureRadar.By comparison, the number of homes reverting to banks in all price ranges combined peaked in the thirdquarter of 2008.
Many of the reasons the rich lose homes to foreclosure are no different from those of moderate- orlow-income borrowers — poor ﬁnancial management, the loss of a job, a drop in home value — saidMark Goldman, a foreclosure expert and loan ofﬁcer who teaches about real estate investments andﬁnance at San Diego State University. That the top of the market is still seeing increased foreclosures mayreﬂect the staying power of owners with deeper pockets who could hold on to their homes when theeconomy ﬁrst faltered, he said.
Some well-heeled homeowners were hit particularly hard when the stock market tanked and the ﬁnancialscene ﬁzzled. Others, such as the original owners of the Wells Fargo beach house, saw their investmentswiped out by Bernard Madoff’s massive fraud scheme.
But none of that unsavory association was apparent in the polished staging and marketing materials aboutthe 3,800-square-foot home prepared for Wells Fargo by listing agent Chad Rogers of Hilton & Hyland.(“Walls of glass create an unparalleled indoor/outdoor environment…. Wake up to the gleaming Paciﬁc inthe sumptuous master suite.”)
In fact, unless one reads the ﬁne print, it is sometimes hard to identify a pricey property gone bad. Rogers’ Hilton & Hyland colleague David Kramer, however, takes a different approach when sellingbank-owned property. A 12,000-square-foot contemporary Mediterranean he has listed with other agentsrecently hit the market at $8.595 million. Included in the MLS remarks describing the property: “lenderowned” and “originally listed at $16.95 million.” Who doesn’t want to know they are getting 50% off, he said.
Not every REO is owned by a bank. Sometimes the new owner is a private money lender. One such corporate-owned REO in the Beverly Hills Post Ofﬁce area is an 11,000-square-foot Mediterranean on more than two acres with a tennis court and swimming pool that is priced at$7,999,000. The original owner had purchased the property in the 1990s, but after borrowing against theproperty for a business that didn’t survive the economic downturn, he couldn’t support the payments, saidlisting agent Danny Batsalkin of L.A.-based Boulevard Realty.
Unlike the bank-owned competition, the house comes with an offer of ﬁnancing — 20% down at a 5.99%interest rate and three years of interest-only payments. “This does make it more attractive,” Batsalkin said.
Changes in banking requiring full-documentation loans have altered the ﬁnancing picture in the upper endof the market, Goldman said. “In 2006, you could borrow 70% to 80% on a $10-million house,” he said. “Today you might need 50%down.” Working with a seller that is a bank can present challenges.”In general, my experience has been that banks are really bad at managing real estate,” Goldman said. “You probably have to go through three or four good offers before someone will sign on the line to sellthe asset.”
The lender is not motivated to let the property go at a discount, because it still shows a higher value whileit’s on the books, he said. That opinion, however, is not shared by Karen Caskey, an REO property specialist with RS Capital who isbased in Beverly Hills.
The bigger lenders all have speciﬁc documents and forms to ﬁle, such as proof of cash, said Caskey, whohas worked with REO buyers and sellers since 1993. “If all their requirements are met, I’ve had an answerthe same day.” Caskey says she is sometimes competing against multiple offers for multimillion-dollar REOs.
Other lenders are lowering prices. A bank-owned property in Beverly Hills listed at $3.1million thatCaskey has been tracking was dropped to $2.65 million this summer. “There’s good savings in the$2-million- to $4-million range,” she said. Though there has been much speculation about a so-called shadow inventory of REOs ready to hit themarket and depress prices further, Goldman is not concerned. “We’ve been waiting for a year and a half for the deluge of bank-owned properties, and it hasn’t happened yet,” he said.
Another reason to be less concerned about shadow inventory, Goodman said, is that now there’s moreinterest from banks to modify loans or go for a short sale, in which the house sells for less than thelenders are owed. Some high-end homes have not returned to the market and instead are being leased back to their formerowners. “The banks will sell them in four or ﬁve years” when prices have rebounded, Caskey said.
In the current market, it can take years to get a new owner into a property that went into default. Retiredpro ballplayer Jose Canseco lost an Encino home in 2008 to Washington Mutual. He had purchased theproperty for $2.785 million. A sale ﬁnally is pending on the REO, listed at $2.125 million.
Whether luxury REOs represent bargains that won’t be available again for years remains to be seen. Bryan Ochse of Media West Realty in Burbank, which works with 11 lending institutions and specializesin REO sales, isn’t betting on it. “We believe the high end is ready to fall apart,” he said.
Goldman is more optimistic about the market’s recovery. There has been a lot of talk recently “about a double-dip” in the housing market, Goldman said. “I’ve beenthinking of the housing market as a light airplane landing and it kind of bounces. Until things stabilize,we’re going to see some up and down here.”