Funny Money

As if to prove that rich people’s money is not the same as yours or mine, a penthouse in London has just sold for £137 million.  And that’s not all:

“The penthouse was purchased as an empty shell, and the buyer is spending £60m fitting it out.”

The developer is more than pleased:

“Nick Candy said that 45 flats in the development have sold so far for a total of £963m – an average of £22m each: “No one else has achieved that – not just in London, but anywhere in the world,” he said. “

It has a great view I am sure, and access to room service from the neighbouring Mandarin Oriental Hotel is included. But come on — $300 million for an apartment!   That’s Monopoly money for sure.

The Rich Get Richer

The major UN Report on Global Economic Activity released in December 2009 stated that:

the continued weakness of the world economy is manifest in the continued increase in unemployment. Through the end of 2009, the recovery will have been “jobless”. Unemployment  rates are expected to continue to rise well into 2010.  The number of unemployed has more than doubled in the United States since the beginning of the recession in December 2007 [to] the highest in 26 years. … The unemployment rates in the euro area are also estimated to have increased by more than 2 percentage points in 2009 … Unemployment rates in transition economies and developing countries have also moved higher, in particular in the Commonwealth of Independent States (CIS) and Central and South-eastern Europe, where the number of unemployed increased by as much as 35 per cent in 2009 … In East and South Asia, vulnerable employment affects about 70 per cent of the workforce … In sub-Saharan Africa … the share of working poor (that is to say, those earning less than $1.25 per day in purchasing power parity (PPP)) is expected to increase to about 64 per cent in 2009, up from 59 per cent in 2007.

Another report notes that

at the end of 2009, there were 81 million “economically active” youth aged between 15 and 24 who were unemployed, or 13% of all such youth around the world — an increase from the 11.9% in 2007.  In other words, the situation for that group is getting worse.

But luckily we have Luxist to remind us that it is not all doom and gloom around the world.  A couple of articles in particular caught my eye today. First there was the story of the three-bedroomed apartment in Monaco that someone just bought for $308million.  Let me repeat that: a three-bedroom apartment in Monaco that someone just bought for $308million.

One of its main features is the fully developed rooftop, which looks like it belongs on a cruise ship:

Personally, I wouldn’t buy it because it is not even private! Look at the picture above and you can see a tower overlooking the grotto.

The other story was about a 21-year old kid with a $5million car collection that will become a $10million collection when he has his next birthday.  He doesn’t have to work for it, or get a certain grade level; his daddy will simply give him another $5million worth of cars for his birthday.

All his vehicles have personalized license plates featuring the figures 070, which cost an additional $150,000 a pop. The international playboy spent the summer flying his cars to London, Montreal, Las Vegas and New York to go on high-octane driving tours with friends.

I read that just after learning about the 81 million unemployed youth, youth that need to work to help feed their families. I’ve since looked up that average student debt in the UK is $40,000, with similar figures in North America.

Will the rich never understand the problem with such conspicuous consumption? To broadcast the spending of $308 million on an apartment while millions are homeless and hundreds of thousands of ordinary houses are in foreclosure, to give a work-shy kid four “Ferraris, five Porsches, three Lamborghinis, two Rolls-Royces and a Mercedes SLR McLaren” while his contemporaries are buried under huge debt loads and unable to find gainful employment; this almost screams for a revolution. I guess they think their private armies will save them.  Well so did Louis XVI.

A Classic Wright House For Sale

The Fawcett Ranch House near Los Banos, California, is for sale.  It is one of the most complete examples of Frank Lloyd Wright’s architectural vocabulary.

All this and 80 acres of San Joaquin Valley farming land can be yours for the surprisingly low price of $2,700,000.  I would if I could.

Too Rich For Good Taste

America is going broke.  Prisons are being closed and inmates released to save money.  Government workers are forced to take unpaid days off each month.  Hundreds of thousands of workers are being laid off each and every month.  Millions of homeowners face foreclosure or at least uncertainty about their homes.  The stock market hit a 10-year low.  Banks are failing every week.  It is a disaster out there.

But no worries if you are Mr. Mohamed Hadid, Los Angeles real estate developer.  He claims to have spent more than $59 million constructing his 48,000 square foot mansion in Bel Air.  Now he is selling the estate with an asking price of $85 million.  For that you get 10 bedrooms and 14 bathrooms, a whole bunch of other rooms, a huge infinity pool, and 280 degree views over Los Angeles.

Just a few days earlier Iris Cantor put her own 35,000 square foot Bel Air mansion on the market for $53 million.  And it is not even her main residence.

This really is just too rich.  I’m a great believer that people should be able to do with their money whatever they want.  But this seems to me to be rubbing everyone else’s noses in it.  If these folks were hurting and needed to unload their properties to pay bills, that’s fine.  But these are not firesale prices looking for a quick return.

The details and the pictures are from The Real Estalker.

My Own London Underground!

IF today wasn’t Buy Nothing Day — and IF I happened to have a spare $8million burning a hole in my pocket — I’d be really tempted to buy this.

This is one full mile of tunnels and rooms directly under central London.  It is being sold by British Telecom who inherited the property.  As the New York Times reports:

The tunnels were built in 1940 during the blitz, when Britain came under sustained air attacks from Nazi Germany. The government decided to create eight underground bomb shelters in London, as the city’s subway stations were not big enough to accommodate all those seeking refuge.  But the BT tunnels, and one other, were never used by the public because the government needed them for its own operations. The BT tunnels soon became a temporary base for troops before D-Day while another tunnel was turned into the European headquarters of Gen. Eisenhower.  In 1944, the tunnels became a base from which the Allies helped resistance movements in Nazi-occupied countries. Members of the secret service, in offices equipped with telephones and teleprinters hidden beneath the war-torn streets, helped coordinate as many as 10,000 men and women gathering support against the Nazi regime across Europe.

After the war, the tunnel network became an important operations center for the company once known as British Telecommunications. In recent years, though, BT has used the space mostly for storage … Appearing more like the set of a James Bond movie than prime real estate, the complex still has a bar and two canteens, not in use, and a billiard room, not to mention functioning water and electricity supplies.

There are a couple of issues that need to be dealt with …

The air is dry, hot and stale. The constant rattling of London Underground trains rushing through a separate tunnel system a few feet above and the sound of giant ventilation fans make the tunnels a noisy environment.

Baffleboard, that’s what they need.  A few truck loads of baffleboard to muzzle the noise.  Then it could be a really neat downtown hideaway.  Now, about that $8 million ….

Hard To Believe …

… in this challenging financial environment that anyone is seriously contemplating spending $65million for an 8,000 square foot condo — even if it does have the finest views in New York.

The penthouse at 25 Columbus Circle atop the Time Warner Center

features 14 ft. ceilings throughout, elegant and dramatic entertaining space and warm and inviting private sanctuaries. A master bedroom suite encompasses an office, his and her dressing rooms, gym and his and her bathrooms. The 41 ft.-long living room with floor to ceiling windows has the most incredible view of Manhattan. The red lacquered corner library/office also commands a special place of solitude in this apartment. A full dining room with views of the Hudson River is a room of understated luxury. A chef’s kitchen and pantry, a full laundry center, four full bedrooms with en-suite baths and a screening room, round out this amazing property.   25 Columbus Circle represents the ultimate in five-star living and dining, pampering its residents with a complete array of luxury amenities: from a white glove concierge service, access to the gym, spa and pool of the Mandarin Oriental Hotel, private screening room and a discrete basement garage, to the outdoor roof deck, children’s playroom, board room with Park views, private storage and ballroom.

$65 million for white-gloved concierge service — you got me right there.  My check’s in the mail.

Ooops! Where Did All My Money Go?

It’s been said that the truly rich are somehow insulated from the financial troubles sweeping the globe these days.  However, that may not be the case for the Russian oligarchs.  It would appear that much of their wealth is speculative and thus easily damaged by the kind of stock market collapses we saw this past week.

Roman Abramovich, for example, is said to have lost $20 billion of his $23.5 billion fortune.  That leaves him $3.5 billion which sounds huge to you and me.  But for a man who recently agreed to pay $500 million for a house in the South of France, has a $350 million yacht on order, and shells out $120 million for two paintings, a bank balance of only $3.5 billion must cause some re-thinking of priorities.

So long as he continues to fund Chelsea football club, then all will be right in heaven.

Update:

According to this article, the middle-level rich in Russia are still out there spending like wild things.

Call it denial, call it bravado. Ignoring a drumbeat of dismal financial tidings, some Muscovites continue to blow their rubles and petrodollars with aplomb, spending with the trademark abandon that’s turned this oil and gas boomtown into a notorious hub of opulence and hedonism.  From the Ritz-Carlton hotel to the luxury boutiques of Red Square, consumers and salespeople alike last week shrugged off fears of a crisis. Tomorrow will take care of itself. As long as there’s cash in hand, Russians will go ahead and buy.   “Not every crisis will bring us down,” said Oleg Uvarin, an interior designer who charges wealthy clientele upward of $800 a square foot. “Through history, rich Russians have always lived lavishly. Russia will always be in the money” …

A 25-year-old model named Tatyana Zelenskaya stalked the shops in leggings and cashmere, blond hair swirling around her shoulders. “Of course I’m worried — my husband’s company has lost 60% of its value,” she said. In that case, doesn’t her husband, a coal executive, ask her to curb her spending? She threw back her head and roared a belly laugh toward the ceiling.  “He can’t say that to me,” she snorted. “Not to me.” She disappeared into Moschino.

Upwardly Mobile

What image comes to mind when you think of “mobile homes” and “trailer parks”?  I bet it is not this:

Or this:

And I bet the $1 million price tag doesn’t match the sterotype, either.

This is the view from the Paradise Cove mobile home park in Malibu, California.  Pretty neat.

These images come from a fascinating Los Angeles Times slide show study of the Malibu areas of Paradise Cove and Point Dume Club. The areas feature many double-wide and manufactured homes.

And why not?  Every home is manufactured, of course.  Take a look at the cookie cutter houses in the average North American suburban sub-division; and prefab houses were a popular option in the early part of the last century.

Trailer parks on the edge of our cities that look like shanty towns should no more influence our overall opinion of mobile homes than say, inner city slums should influence our views of mansions.  There is no intrinsic difference that I can recognize.

So, it comes down — as it always does — to location, money, money, and location.

The Russians Keep Buying

The Russian oligarchs are becoming the Roman nobility of our generation. They just can’t seem to stop buying stuff — and always the most expensive.  We’ve seen them gobble up art (and skew the markets) and Mediterranean houses (and skew the markets).   They are the primary buyers of mega-yachts, no doubt skewing those markets upwards also.

Well, it seems they are doing the same thing at home.  A seven-storey townhouse condo near the Kremlin in Moscow has been purchased for $99 million, or 2.5 billion rubles.

Property agency Agent 002 said last Friday an unnamed buyer had splashed out on the seven-storey 1,300 square meter apartment near the Kursk railway station. “For Moscow, it’s an absolute record,” said Agent 002′s spokesman Ruslan Barabash. Barabash declined to identify the purchaser, but said he was an “active businessman” aged around 40 and not one of Russia’s most well-known tycoons.

“It’s a completely beautiful home. The design is in the ‘high-tech’ style,” said Barabash. The townhouse apartment, close to the Kremlin in the center of a sprawling city of 12 million people, has its own swimming pool, a children’s floor and a winter garden on the roof …

Real estate analysts believe the current record could soon be broken, with demand strong at the top of the market. “I think this is price of 2.5 billion roubles is not the limit for Moscow and in the near future there may be even more expensive sales,” said property analyst Tatiana Makeeva.

Crazy times all over!

The Body Language of Recycling

The house across the lane from us is being demolished.  It may well come down tomorrow as they have an expensive piece of heavy machinery sitting in the yard.   Yesterday, a crew came and pulled out the fixtures and fitting, appliances and the like.  Today, workers laboured to strip the interior, and pull the front from the house.  This evening came the “salvagers”.

An ineffective temporary fence has been thrown across the back yard, but it doesn’t stop anyone.  One of the neighbourhood’s local binners came by and confidently went through the junk in the yard, finding a bonus of a dozen bottles.  He was clearly pleased.

Later, a couple of women came by.  In the end, they carted off about a dozen or more slats from the old wooden fence, but they searched around for a long time.   They also briefly went into the open back door of the house and their body language was illustrative.   You may notice that when anyone is entering a place where they shouldn’t be, they tend to try to act overly casual.  A common thing is to see both hands behind the back, and the head thrust high.  And sure enough, both women put their hands behind their backs and extended their necks as they entered the door.  Classic stuff.

And as for salvaging, I found a perfectly good heavy ax in the lane this evening.

The Russians Are Coming, The Russians …

I have written a few times about how the Russian oligarchs’ money is re-shaping the art market.  I am also aware of their influence on the London housing market.  But this is amazing:

A mysterious Russian billionaire has trumped his big-spending rivals and broken a world record by splashing out €500 million (£392 million, $700 million plus) on one of the most sumptuous villas on the French Riviera. The price of the Villa Leopolda, a Belle Époque mansion on the heights of Villefrance, has amazed estate agents but fuelled local worries that the invasion of Russian money on the Côte d’Azur is getting out of hand.

Since the early 1990s, Russian oligarchs, drawn by memories of the Riviera-mad old Russian aristocracy, have been piling into seaside properties at Cap Ferrat, Cap d’Antibes, Saint-Tropez and the other great playgrounds. None, however, has come near the price with which the unnamed Russian clinched the Leopolda deal with Lily Safra, the widow of Edmond Safra, a Lebanese banker who was killed by an arsonist’s fire in Switzerland in 2003 … Its turreted mansion and two guest houses sit in 20 acres of grounds with hundreds of olive, cypress and lemon trees tended by 50 gardeners. Former members of the Israeli special forces are said to ensure Mrs Safra’s tranquillity there …

Jean Pierre, a high-end agent, said: “It’s completely surreal and we are really uneasy. We don’t dare any more to propose any price below €100 million for these clients. Anything below and they throw you out…and you should see how they do it,” he told Le Parisien … Jean-Marie Tarragoni, a Nice property manager, said that the Riviera market had gone mad. “Two hundred people are completely destabilising it. These Russian oligarchs have thrown themselves into a bidding war like Onassis and Niarchos.” Rivalry between Aristotle Onassis and Stavros Niarchos sent local prices rocketing in the 1950s.

I’m not even going to try to figure out how many families that sort of money would feed for a decade.

Who’s Got The Big Money

Last week, I spent some time following the big Sothebys and Christies Post War Art auctions. As you may recall, the big items of interest were the Francis Bacon triptych that sold for $86million and Lucian Freud’s “Benefits Supervisor Sleeping” that fetched $33.6 million. Now, we know the buyer of both.

Listed as the 15th richest man in the world, Russian billionaire Roman Abramovich (who also owns Chelsea Football Club) purchased both lots, shelling out more than $140m (including buyers’ premiums). Abramovich isn’t known as a major art collector. It is assumed these pieces are for display in his not-yet-completed $300 million home in one of London’s prime squares.

His money has done a power of good for Chelsea football; perhaps he’ll now do the same for the art market.

The Extreme Home

Some while ago I wrote about how my wife and I like to look at other people’s houses. This week, Forbes takes us to the extreme — the two billion dollar home in Mumbai, India, that is now almost complete for Mukesh Ambani, the fifth richest man in the world. Yes two BILLION dollars. But you get quite a bit for the money. The 27-story skyscraper contains 400,000 square feet of living space.

From the article: “The home will cost more than a hotel or high-rise of similar size because of its custom measurements and fittings: A hotel or condominium has a common layout, replicated on every floor, and uses the same materials throughout the building (such as door handles, floors, lamps and window treatments). The Ambani home, called Antilla, differs in that no two floors are alike in either plans or materials used. At the request of Nita Ambani, say the designers, if a metal, wood or crystal is part of the ninth-floor design, it shouldn’t be used on the eleventh floor, for example. The idea is to blend styles and architectural elements so spaces give the feel of consistency, but without repetition. Antilla’s shape is based on Vaastu, an Indian tradition much like Feng Shui that is said to move energy beneficially through the building by strategically placing materials, rooms and objects.”

The first six floors are parking garages for family, staff, and visitors. “Hanging vertical gardens dot the exterior. While they make for good decoration, their key function has to do with energy efficiency: The hydroponic plants, grown in liquid nutrient solutions instead of soil, lower the energy footprint of the home by absorbing heat and sunlight and providing shade that helps keep it cool.”

I believe one might question how one man has amassed $43 billion in assets. But, once the guy’s got it, I can’t think of any reason why he shouldn’t spend it any way he wants. Looking through the pictures, I don’t much care for this place but if he and his family enjoy it then good for him.

Other People’s Houses

We like to have breakfast together, even though I leave for work quite early and she doesn’t need to. It has become one of our routines. And like most routines, it has a set of components. We eat on my desk in front of my computer screen, we remind each other to take our pills, and we look at other people’s houses.

Mostly these are very rich people’s houses, and mainly from the Real Estate pages of the online New York Times. Halstead Properties Luxury Portfolio is always a fine place to start, with their range of $20million townhouses, $14.5million apartments and $12,000 a month empty spaces.

What’s really fun are the “What Can You Get For…” galleries. This allows you to see three — usually — properties in different areas of the country that are on the market for roughly the same price — say, $900,000 or $12,500,000.