Friday, May 22, 2009

UPDATE: Dick Fuld

Earlier, while Your Mama was rolling around in the real estate misfortunes of Park Avenue banker name Ramesh Singh, we mentioned that the almost universally loathed ex-CEO of Lehman Brothers Dick Fuld Jr. had quietly placed his posh Park Avenue co-op apartment on the market with an asking price of $32,000,000.

Well, apparently, Mister Fuld and the Missus have decided against selling their 6,200 square foot, 16 room spread at 640 Park Avenue after all. Or at least that's what his p.r. people (or perhaps the real estate agent charged with quietly getting the place sold) are telling the the real estate gossips at the Wall Street Journal.

Hmm. Does anyone else smell something fishy?

49 comments:

avg joe said...

Well after the villa leopolda fiasco, (was worth 750MM, now worth 50MM) "Luxist"

I am sure many of the super rich have to re evaluate their estates, penthouses, castles

I smell trillions in lawsuits coming down the pike in a year or so

now the reasoning on the villa leopolda is that it is a piece of art and like art prices go up and down, but 90%???, anyway they also said that these works of art are worth whatever the buyer will pay at any given time

sounds like a crock if you ask me

yep lawsuits are a coming

:)

:{} avg joe

:{ avg joe said...

btw if the rich russian put down 55MM as a deposit and lost it because he backed off

but now the estate is worth 40-50MM

does that make the russian the new owner ?

just sayin

Anonymous said...

You talk so much shit it's actually unbelievable! Are you a Realtor specializing in property in the South of France? Like I said before in another thread ... PROPERTY PRICES IN FRANCE HAVE BARELY BEEN AFFECTED BY THE GLOBAL RECESSION!

Villefranche, St Jean Cap Ferrat, Cap D'Ail, Cap D'Antibes, Cap Martin, Monaco are PRIME locations & contain a good portion of the worlds most expensive property. They have remained largely unaffected. I repeat, UNAFFECTED!

The only bargains around are due to people trying to unload 2nd/3rd/4th homes b/c they need the cash ...

So basically, stop talking about something you know nothing about!

Anonymous said...

"It has been revealed that the overseas property hotspots in Southern France are seeing demand from overseas property buyers continue to outstrip supply. The French National Estate Agents Federation (FNEAF) reports that French property prices overall rose by 7.1% in 2006, 3.8% in 2007 and 1.7% in the 12 months up to July 2008 – making it one of the few places in the world that has seen continual price rises throughout the credit-crunch.

Liam Bailey, chief market analyst had this to say of the revelation:

"France has seen such continued – if steady – increases in property values, mainly because it never really became swept up in the overseas investment boom. In the last 2-3 years thousands of savvy people with a pound to spare decided to put their money into overseas property, but did so, mainly in off-plan properties in emerging markets where prices were incredibly low, and the opportunity presented itself for immediate high-level gains and incredible rental yields. France never exactly offered an abundance of these properties, and so has and will remain to be one of the favorite places for people [especially Brits] buying a resale property as a holiday home.”

The locations noted as being continually successful in terms of overseas purchasers by the FNEAF were, particularly Cannes joined by its Southern France neighbors: Cap Ferrat, Mougins and St Tropez.

Anonymous said...

"Although house and property prices have seen dramatic declines recently in some countries (e.g. USA and Ireland), prices have been relatively stable in France. In fact, in January of 2009 there was a slight increase (0.6%) compared to the previous month. Furthermore, 2008 saw prices decline by only 2.5%, which did not even offset the 2007 increase of 3.8% (figures from FNAIM, France's national association of estate agents).

Unlike certain other countries, France is not experiencing large property price reductions. Instead, it has seen over the past 4 years a reduction in the rate of house inflation, with last year a moderate price reduction. The many predictions of a large fall of French property prices in 2008 have been proven incorrect and more recent predictions for a large fall in 2009 will likely prove equally incorrect.

Historically, France has had relatively stable prices. In any given year property may increase or decrease by a small amount, but traditionally prices have been broadly in line with inflation over both the medium and long term. From 1999 to 2006 there was a change from this traditional pattern, but market fundamentals are now reasserting themselves and the French property market has returned to its normal behavior since 2006.

Expectations that this will be followed by a period of large property deflation are based largely on the experiences in other countries (such as the USA and Spain). However, such predictions do not take sufficient account of the important differences between these markets and the French market. To begin with, price inflation in France has been much lower than in these other countries, so the French property prices have not reached the excessive levels to be found elsewhere and consequently are under much less pressure to drop.

This view of property as a long-term investment, both by property owners and by banks, adds considerable stability to property prices. In the current economic crisis, the fact that France does not have a large number of high-risk borrowers is equally important. In the USA, as the economic situation has declined, many borrowers have defaulted on their mortgages and consequently a large number of properties are forced sales. These forced sales have reduced property prices, resulting in further mortgage defaults and additional forced sales. Thus, in the USA one sees a large increase in the supply of property, at the same time as demand for property is dropping due to the economic issues. The large drop in USA, Ireland and Spain property prices is due to this imbalance of supply and demand.

Although France, like all countries, has speculative property purchases and mortgage defaults, the levels are far lower than in other countries due to the reasons discussed above. Consequently, it has not seen a large increase in property supply and consequently is not experiencing the property price issues found elsewhere."

:{} avg joe said...

okay

if all that you are saying is true then how come a 750MM property lost 95% of it value ?????

just askin

W. Churchill said...

Who would want to live in Frogland anyway?

:{} avg joe said...

First of the many revenge tactics to come for bad real estate deals

'CSI' Writer Accused of Televised Revenge Plot

Posted May 22nd 2009 6:15PM by TMZ Staff

This is one of the best lawsuits we've seen in a while -- a writer for "CSI: Crime Scene Investigation" is accused of naming some seriously perverted characters on his show after a real-life couple who allegedly screwed her in a real estate deal gone bad.

According to the suit, filed moments ago in L.A. County Superior Court, Scott and Melinda Tamkin claim "CSI" writer Sarah Goldfinger sought revenge against them by allegedly using their names and likenesses to craft a recent episode of "CSI."

Here's the rub -- the Tamkins claim their fictional counterparts "engaged in a reckless lifestyle of sexual bondage, pornography, drunkeness, marital discord, depression, financial straights and possibly even murder."

The Tamkins claim CBS acknowledged the problem and changed the names "at the eleventh hour," but because the first names matched, and the original last names had already made it to the Internet -- the damage was already done.

Now the Tamkins claim their good names have been sullied -- and are suing CBS, Goldfinger and the production company behind the show for at least $6 mil.

Anonymous said...

Sorry Joe - As just reported here in Hawaii, the best neighborhoods on Oahu are only down by 5% or less.

Once again, 'worth' is only what someone is willing to pay.

So if you bought a lot for $2mil and spent $1 mil on constructing an ugly pile o'crap that nobody wants to live in and then list it for $10 mil but it only it sells for $3 mil. That doesn't mean the 'market is down 70%'. It's just dumbshit development.

Hanalaie said...

oh yea mr or mrs genius ?

I have a condo up for sale in hawaii on the beach on the gold coast for 1MM, 4 in my building sold for 1MM last year,

this year, esp now

no takers

but I have plenty of offers for 300k cash

so stick your theory up your ass you dumb fuck

Anonymous said...

A friend just saw the leopolda story today on luxist and canceled his escrow for a nice estate on sunset plaza

if more see this article prices in the sunset plaza area are going to drop like a stone

what do you think ?

should luxist get shut down ?

should they get sued ?

Anonymous said...

is that story even really true, or made up ?

Anonymous said...

looks like a real story to me

http://www.luxist.com/category/estates/

Villa Leopolda in Cap Ferrat (above), once the world's most expensive estate with a $750 million pricetag, may now only be worth $40 - $50 million thanks to plunging prices in the wake of the global recession, according to Sotheby's International Realty CEO Alexander V. G. Kraft. "For trophy properties it used to be a question of how much someone was willing to pay," Kraft tells the London Telegraph. "They would come quietly onto the market – they would be marketed under the table. This system really has totally collapsed. Buyers willing to pay anything like those sums just don't exist anymore." The paper says "panic sales" are on the rise in the ritzy area.

As we wrote about back in February, Russia's richest man Mikhail Prokhorov had reportedly agreed to purchase the Villa for $750 million but later backed out of the deal, forfeiting a $55 million deposit. The estate has not been re-listed. "Prices are coming more in line with the rest of the market," Kraft declares. "Trophy properties will be more in line with 'normal luxury properties' – about 20 to 30 million [euros]." Peter Ilovsky, director of Sotheby's International Realty in Cap Ferrat, says they're still good investments however. "Owning a property in Cap Ferrat is like having a Picasso," he tells the paper. "It's certainly better than placing the money in a Swiss bank."

Anonymous said...

Obviously you cannot use 750 million as the top price for the Leopolda property since it was never paid and the crazy Russian who thought he would pay it backed out. The place was never worth that and never sold for that. To do a proper calculation you'd have to know what Ms. Safra paid for it (ie last sale).

White Chocolate Mess said...

fishy as the exhaust fan at Petrossian, honey!

Anonymous said...

Gawker has photos of the Fuld palace.

Anonymous said...

got gold?

Anonymous said...

i was completely distracted this week with work and didn't check in here until today. I am commenting on the Ramesh Singh posting of several days ago because this is a related posting and if I post this on the Singh story way, way down there nobody will ever see it.

The story of Ramesh Singh and his wife, who goes by Farida Kahn, is not new. I believe that Josh Barbanel of the New York Times wrote a pretty extensive piece about their travails upon which Mama's item here represents an update. These people are absolutely not celebrities in the traditional sense but they do seem to strike a chord, as they say. A certain kind of zeitgeist is encapsulated in their story.

Let's put it this way, someone I know very, very well worked with the Singh's when they were at 940 Park. I have to laugh at the dis of 940 because it is absolutely the best of the three Park Avenue locales of which they have been involved. Nobody important lives there? Well, downstairs from the Singh's was Tom Brokaw and wife. The Singh's had a duplex penthouse with a terrace off the upstairs bedroom floor. They shared an elevator landing and had an adjacent terrace with Cathy Black, who I believe is the CEO of Hearst. Next to them, on the other side, with extensive planted terraces were the very old money Frelinghusen's. So. . .

The person I know dealt solely with Farida. In several years of association, never laid eyes on Ramesh. Farida is one of the most beautiful women ever. Her mother was Scottish and her father was of Pakistani heritage, I believe, and the combination of the two is Halle Berry level. She, by the way, appears totally American in manner She was from a good family, her father was a doctor, but she surely wasn't used to this level of money. The diamond studs she wore on a daily basis were of the Oprah caliber. Quite distracting, it is reported. She had also worked in banking. Definitely ran things like a woman who had been out there in the corporate world. Not at all shy to talk money. Played her cards very close to the cuff. She had a very specific budget in mind for the project that my friend was working with her on, and that budget now can be seen as a complete joke. She would literally ax three hundred here, a hundred there to get to her number. (Oh, the chairs with the green fabric, seen in the pictures here, were in the 940 apartment, in that very same fabric. . .)
They had a little girl during this time, and then she became pregnant again, and it was at this point that they decided to move. His very traditonal parents were often in residence. So they moved from a penthouse duplex to a fifth floor apartment that had something that apparently they felt they needed.

Losing this money is a blink to them. I would have to believe they have made hundreds of millions. If they lose ten million here, so what. I mean, that's business. Happens all the time. You win some, you lose some.

Anonymous said...

Two corrections to the above post. The building, as Mama correctly noted in her post, is 941 Park, not 940. And Cathy Black's title is President of Hearst Magazines, not CEO. But still a big deal in magazine publishing. Not that anyone cares.

After some thought, I will also take back what I said at the end about the Singh's not feeling the hit of this loss. Clearly, I have no idea what their situation is, but if they didn't need to get their money out of this thing, why would they not just sit tight? On the other hand, they may suspect things will get significantly worse in this segment of the Manhattan market and thus think it's best to get out now at what people think is a 'good value.' That value may not look so good in another year. Their biggest problem is that they overpaid for a problematic/not very good apartment as opposed to having overpaid for a really good apartment.

Also apparently no serious social climbing aspirations on their part as indicated by their vacation properties in Westhampton Beach and Aventura. . .

:{} avg joe said...

if you have 10 MM and you get a loan for 90 MM to buy up more properties that are valued at 300MM you now have a net worth of 300MM

but if you can only get 80MM for your investment you are SOL and you will have to sooner than later sell your own place to save face with the banks

and that is what is happening right now, I suspect that many more properties are going to drop like a stone throughout the US as investors cannot make their monthly payments to the bank,

even the interest rate alone on a 90MM loan is 300k a month, who can make 300k appear out of thin air ?

so we will see many more start to declare bankruptcy to avoid jail or prison and more and more properties are going to drop 90% in value as there will be no more investors to keep the market up, during this time wall street will continue to go up, as wall street has distanced themselves from real estate as a whole and the govt will buy up distressed properties with taxpayer dollars for 5 cents on the dollar

to make matters worse local governments in highend areas are going to force the broke exec's to leave .......

HOW ?????????

by raising local taxes 50%

in the poor areas the taxes will stay the same, remember the rich do not riot, they just leave in shame to live among the poor

it hath been foretold and the long long long ride has just started

:{} avg joe said...

This is a good example, and she is not in real estate but her assets are now way way way down and if she was doing great you would see another record sale for a small condo in manhattan selling for 5MM,

not anymore ..........

A lawyer for B2Pro, Scott Markovitz, tells Page Six the company is considering filing an involuntary bankruptcy petition against Leibovitz. "We haven't filed anything yet, but we are doing our due diligence," he said. "We're in touch with Annie's people and they are cooperating, so hopefully it won't come to that."

Leibovitz seems to be surprisingly cash-strapped given her income. At the end of last year, she was forced to borrow $15.5 million, using her Greenwich Village townhouses and the rights to all her photographs as collateral to pay off mounting debt.

She started piling up debt with the extensive renovations of two adjacent West 11th Street townhouses, which undermined the foundation of a third, forcing her neighbors to evacuate to a pricey hotel and to sue her.

In November, a stylist at the Art Department Creative Services who'd worked with Leibovitz on her big-budget Disney campaign featuring stars like Scarlett Johansson sued her for $400,000 for allegedly unpaid bills. The case is pending.

Calls to Leibovitz's studio and her lawyer were not returned.

Joan Crawford said...

Oh really, did they like it?

Anonymous said...

Some of you fools are crazy.

Just because the average sales price increases, DOESN'T mean the market is stable.

How many properties were actually sold in comparison to a year ago?

You know, in Manhattan the average sales price of an apartment actually went UP (to $1.4mm, I believe) compared to last season yet sales are down dramatically which means it's not a healthy market.

Alex said...

Hi @avejoe and @'anonymous' spammer

The article on by Luxist about Villa Leopolda has proved to be wrong after the Telegraph came up with another article few days after the first one. Seems like these online spaces are turning out to be a portal of gibberish gossip.

So here is your treat

http://www.telegraph.co.uk/property/5362283/Property-overseas-chill-wind-on-Cap-Ferrat.html

"Cap Ferrat on the French Riviera was the epicentre of the economic boom. Villas on this small pine-covered peninsula near Nice were selling for more than €100 million in 2007; even the most ordinary-looking properties were snapped up by Russian oligarchs for eye-watering sums. But the Cap has been favoured by European royalty and aristocracy since the early 20th century, when King Leopold II of Belgium owned an estate there, so it was no wonder that any self-respecting nouveau millionaire wanted a piece of it.

Last summer, prices reached boiling point when Villa Leopolda, with majestic views over Cap Ferrat from Villefranche-sur-Mer, went on the market. Chelsea Football Club owner Roman Abramovich, who has several properties on Cap Ferrat, was rumoured to be interested, but then the richest man in Russia, Mikhail Prokhorov, reportedly agreed to buy it – for €500 million (£440 million). The sale would have crowned the belle époque villa the world's most expensive property. But the banking crisis set in, and Prokhorov was forced to pull out, losing every penny of his €39 million deposit. Leopolda's owner, Lily Safra, donated the money to charity"...

Aggregate the right content and avoid misleading information.

Anonymous said...

so where in there does it say the villa leopolda is worth more than 40MM ?????

Anonymous said...

ok so is there anyone else who seems to think that maybe this is all because the damn villa was never worth $750mm in the first place? I mean lets be honest that was a completely absurd price to be asking, even for such a nice place. And to all those who seem to think that the South of France real estate has not been affected, just cause the avg. sales price doesn't drop doesn't mean that it's unaffected. I live in an area where the avg. sales price hasn't dropped but sales are down like 80% from a year ago. So your trying to tell me that makes this particular area unaffected? uhhhhh...i don't think so, the avg. sales price hasn't dropped but that's cause pretty much nothing is selling, period. This villa was never worth more than 55mm in the first place, so it really hasn't lost 95% of its value, someone just finally got a reality check and realized they were dreaming with that price.

:{} avg joe said...

So............

The russian now owns it yes ??????

:{}

Anonymous said...

@Avg Joe...u are indeed an 'Average Joe' with less than average idea or no knowledge about the real estate market.
The prices cannot drop 90%. Start reading now or if you don't have the habit of reading, then watch Television.

Anonymous said...

@Anonymous

reply for your question.

"so where in there does it say the villa leopolda is worth more than 40MM ?????"

Where in the world would you find listings of properties that are of high value and mentions the price. Who would even come out to make a statement on the price of high value properties like this. So the article that had come out regarding the price crash is completely fabricated just for the hype and to increase the circulation.
We call that 'yellow or tainted news'.

Thanks

Anonymous said...

"Losing this money is a blink to them. I would have to believe they have made hundreds of millions. If they lose ten million here, so what. I mean, that's business. Happens all the time. You win some, you lose some."

Yes, I would believe they have MADE hundreds of millions. However, people like them don't store their earnings as gold in their cellar. Most of the money was probably in deferred compensation - UBS AG chares and options - because a person that high up the ladder must have a lot of company shares to prove that s/he believes in the business and willing to bet their own wellfare on it. UBS Shares lost 80% of value, and options are worthless now. The rest of their portfolio, which was likely divesified, lost 30-40% in 2008. Singh really (I mean REALLY) was wrong about the market. His real estate dealings show that he managed his personal money in the same way he did with the clients money. I would expect the same goes about the rest of his portfolio. I would not be surprised if his non-RE portfolio is down to $10-20M, and he is selling properties because he can't pay mortgages/taxes/fees without depleting his other holdings at a very alarming rate. This is why he had to sell his old digs at half his initial price - it's not about the price he gets, it's about stopping the bleeding. Unlike "Oprah caliber" diamond studs (which are still worth 20% of their "value" at resell), real estate is an expensive asset to hold...

Anonymous said...

"even the interest rate alone on a 90MM loan is 300k a month, who can make 300k appear out of thin air ? "
Puh-leez. Nobody is getting $90M mortgages. Those properties are mostly bought for cold hard cash. There are some people who have a day job (Fuld and co) who may get a huge mortgage, but it is usually limited to their salary, while most of their income is from bonuses and other compensation, so maybe $15M max. However, Russian billioners never take mortgages, and that's what was fueling Southern France.

Anonymous said...

no........

developers did get 90MM to billions in mortgages with only 10% down during the salad years,

they took a tenth of that and bought real estate property for themselves, their kids, moms, dads, other property they bought, they rented out (this is why property also went up 1500% since 2001).......


now with the crash.........

They are scrambling.......

they cannot make the at least "300k" a month in mortgages, they cannot even come up with 30k a month,

so they have to put up all of their personal real estate for sale and take what they can get for it, even if it is as low as 50-90% as

A. Banks are loaning only 20% against mansions, boats, for the most part they are not loaning against common homes anymore,

B. Most of wall streets banking industry has indeed lost 90%

C. Buyers for high end homes are few and far between as they are now "crabs in a bucket eating each other alive"

Understand that if I have a wall street, banking company worth 10 billion and from the it is now only worth a billion but I have 4 billion in debts I can declare bankruptcy and with some clever math I can be back up to 10 billion in a few months, with a new company, new stock, new options ect

you the stock holder ?

SOL.........

and that is what has happend to singh, fuld and many others, only a very very few on this planet now have enough to buy a place for 20MM and they know it, and are overloaded with real estate themselves, and so 20MM will soon become 2MM and the banks know that so 911 is happening all over again but this time it is on a global scale

EVERYONE and I mean everyone is in survival mode

Anonymous said...

missed some words here,

C. Buyers for high end homes are few and far between and so now the high end sellers have transformed into "crabs in a bucket eating each other alive" trying to stay afloat, while the most of the middle to low end sellers are no longer in their homes, they are living in tent cities, their cars, with relatives,

Anonymous said...

Anon. 8:25 am. I took back my "losing this money is a blink to them" comment in the next post, after having slept on it. Who knows, your speculation of their financial situation sounds reasonable, and as if written by someone who has knowledge of folks in their circumstances.

Anonymous said...

"your speculation of their financial situation sounds reasonable, and as if written by someone who has knowledge of folks in their circumstances"

Oh, thanks! No, no particular knowledge, just a bit of speculation based on how events the last two years impacted finances of slightly above average corporate worms like me, projected up a few steps of the ladder.

Anonymous said...

Listen buddy, get over yourself. I was complimenting you for not sounding like you were just talking out of your a**, but apparently you weren't looking for that. I didn't say YOU were in their situation, but that you had "knowledge of" blah blah blah, and indeed you then go on to state that yes indeed you do have knowledge of, "projected up" blah blah blah.

Anonymous said...

Wow, relax... What I meant was that I had not heard any rumors of Singh financial misfortunes, if that's what you meant by "knowledge". I am in a different industry. Fortunately. So, yes, I was speaking out of my derriere, if that's more to your liking.

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