Property Grunt

Tuesday, June 24, 2008

Roll Call: Reuters to the Rescue

Nina from Reuters sent me this email regarding the REUTERS GLOBAL REAL ESTATE SUMMIT which began today.


For News Week of June 23, 2008

ATTENTION: Real Estate, Business and Finance Reporters


Continuous Coverage Available on

New York – Top real estate executives from around the world will visit the Reuters New bureaus in New York , London , Dubai , Singapore and Moscow on June 23-25 to participate in the annual Reuters Global Real Estate Summit – the first to be run concurrently across these five regions. During closed on-the-record sessions, summit speakers will discuss and assess the outlook for the industry hit hard by a weakened economy. Exclusive stories from the summit will be posted online at

If global real estate was at a turning point in mid-2007 after a golden era of sizzling returns and unprecedented cross-border investment, the big question at this year’s Global Real Estate Summit is how far will markets fall?

Will real estate – with its dependence on debt funding -- see out the credit crunch? Or will some property firms have to restructure, or even go under, unleashing a wave of forced selling?

To what extent will weaker consumer spending, jobs cuts, and slower economic growth make things worse by squeezing tenant demand for retail, office, and industrial properties and hitting rents? Will markets that have so far escaped the downturn be dragged down along with the UK , where property values are 17 percent below peak levels?

How much bigger can the discounts to NAV get on US, Asian, and European REITs, and when might property derivatives signal an end to the general malaise?

Most importantly, will debt markets recover, enabling property investors to refinance their assets or cut deals at a time when transaction volumes have slumped? To what extent in the interim will sovereign wealth funds and other cash-rich players, as well as distressed debt buyers and mezzanine finance providers, help to plug the gap?

Expect to see these and other topics in a package of stories, pictures and videos produced at the Reuters Global Real Estate Summit during each summit which can be seen at:

Reuters guests will include:

* CB Richard Ellis Europe, Middle East and Africa President Mike Strong;

* Prupim Asia Chief Executive Alex Hambly;

* AMP Capital Investors Head of Property and Chief Investment Officer Andrew Bird;

* DekaBank Member of the Board of Management Matthias Danne;

* Cushman & Wakefield Executive VP of Capital Markets Group Scott Latham;

* ETA Star Executive Director Abid Junaid;

* Palatium Capital Partners LLP Joint Chief Executive Neil Lawson-May;

* Marathon Asset Management Managing Director Scott Schwartz;

* Macquarie Global Property Advisors CEO of Asia Investments Simon Treacy;

* Lippo Group Chairman Stephen Riady;

* LaSalle Investment Management Regional Director David Edwards;

* Citigroup Head of Global Real Estate Investment Banking James Brent;

* AFI Development CEO Alexander Khaldey;

* Lim Advisors Director of Property Peter Churchouse;

* SL Green and Gramercy Capital CEO Marc Holliday;

* ING Real Estate Country Manager for Singapore and South East Asia Richard Price;

* Land Securities Managing Director of London Portfolio Mike Hussey;

* AMB Property CEO and Chairman Hamid Moghadam;

* Citigroup Property Investors Asia CEO David Schaefer;

* Union Properties CFO Zaid Ghoul;

* RREEF Alternative Investments Managing Director and Global Head Chuck Leitner;

* Nakheel CFO Kar Tung Quek;

* J.E. Robert Partners President and COO Michael Pralle;

* British Land CEO Stephen Hester;

* UOL and Hotel Plaza CEO Lian Kheng Gwee;

* SEGRO CEO Ian Coull;

* Union Properties CFO Zaid Ghoul; and

* ING Real Estate Investment Management UK CEO Robert Houston.

Reuters Summits bring together top executives from key industries in exclusive sessions with Reuters News global teams of specialist journalists. During the course of Reuters Summits, exclusive news stories and video interviews are posted on, providing valuable insight into specific companies, business sectors, and economies.

I will keep you posted.

Monday, June 23, 2008

Vornado getting cold feet?

Back in December 7, 2006, it was reported that the Vornado Realty Trust was to make headway with their new development in Harlem.

Construction on the joint venture project headed by Vornado Realty Trust is scheduled to begin in April. It involves a mixed-use Class A office and retail center in East Harlem. The Vornado real estate portfolio in New York City comprises 18.3 million square feet of office space in 42 office buildings.

Here is the before.

Now the after

As you can see, other then the site being secured, there is no developmental activity. There isn't even a port a potty. And we are already in late June.

I have four theories of why no action as been taken.

1. They are experiencing delays which is normal is for construction.

2. There is no money. With the credit markets imploding and lending standards tightening, it is probably very difficult for even a company like Vornado to secure funding for a project.

3. From fuel to raw materials, the costs of this project have probably skyrocketed. so right now Vornado's operating expenses consists of paying the property taxes while they wait to see the market settle.

4. Vornado might considering selling off the site to another party so they are not bothering in initiating any type of construction.

5. Or the most obvious reason, they still haven't resolved the zoning issue.

Regardless of what it maybe, I would be surprised to see anything done this year.

Tuesday, June 17, 2008

Another great moment in real estate marketing

This came across my path.

It appears proof reading and knowing how to use a printer are not key requirements for this brokerage.

Monday, June 09, 2008

Scarsdale passes gas

In a previous entry I stated how things are going FUBAR in the ultra tony town of Scarsdale. Well good people, I have more evidence supporting my thesis.

Take a look at this ad for this past week from the local newspaper.

One thing you do not normally see in a real estate ad is a raffle for free gas. From what I heard from the sources it was for 25 bucks, which at these prices barely fills half a tank.

In my opinion it appears that the Scarsdale market has gotten so hammered that realtors are trying to take advantage of the high gas prices by offering free gas to lure buyers. It used to be in a town like Scarsdale, the houses sold themselves. But this is just another indication that the Scarsdale brand is not strong enough to attract buyers.

Honestly, I think this gimmick was about as a effective as hiring the guy below as their pitchman. NSFW for graphic violence involving a boomerang and phalanges.

I have also heard some chatter that alot of people who live in this town are being directly affected by the Wall Street layoffs. Which should be no surprise to any of us.

One tragic story that has been going around involves former Bear Stearns employees who got shredded after the merger. Alot of these laid off workers basically put their eggs in one basket by having the majority of their money in Bear Stearns which at this point has gone up in smoke. Alot of these former employees live places like Scarsdale. Now these unfortunate soul are only left with their homes but like the safe with the lost combination, these individuals are left with equity that is locked up until a buyer comes in to unleash all that money. With the current state of the market that won't happen for awhile. And even if things kick up, it is highly unlikely they will get their asking price.

Thursday, June 05, 2008

Oh this is f**ked up

Yesterday morning I was waiting for the train when I peered at another's commuter's Wall Street Journal and was in shock when I read that Ed McMahon was facing foreclosure.

What makes it worse is that Ed McMahon is still recovering from breaking his neck 18 months ago. And he has been able to work due to that injury. Which brings me to my next question which is where is the money? Ed McMahon is the white James Brown because he always been the hardest working man in show business. He was pratically a staple of 80's and 90's television with his gigs on Dick Clark, Tonight show, Star Search and the Publisher's Clearinghouse. And he was known to be a man of great frugality since he was reportedly an ardent fan of Costco.

The irony is that crashing housing market has probably worked to his advantage since the house has been on the market for 2 years.

In more foreclosure news, Propertyshark released its May 2008 report. And its pretty much more of the same. but it appears Queens has become the dominating force

• The foreclosure epicenter in New York City is District 12 in Queens: District 12 in Queens (Jamaica, South Jamaica, Hollis and St. Albans) had 80 new foreclosure auctions scheduled in May 2008. Foreclosures in this Queen’s community district eclipses the entire boroughs of Brooklyn (55 new auctions) and Staten Island (47) for the month.

I can't think of anything witty or funny to say. Honestly, I just wish this s**t to be over. This is really f**ked up. People's lives are being destroyed.

But unfortunately it appears that this is far from ending as indicated by the quote below from the New York Times.

Owners of other eviction companies, like, which offers help with an eviction in any Florida County for around $400, also said customers seemed to be lining up. When they were asked if they saw any sign of a turnaround, of the market’s bottom, their answers were clear.

“We see it getting worse,” Mr. Fedor said. “And worse. And worse.”

Tuesday, June 03, 2008


Currently, the rich getting their respective asses handed them is prevalent theme in this economy. The New York Times most recent article on the woes of the riches of New York which has gotten alto of play on Gothamist and Gawker.

It has gotten to the point that the rich are now dealing with like normal which is consume enormous quantities of alcohol and food.

The drop in wealth has also exposed other personal problems, like bad marriages. Money — which bought jewelry or extravagant vacations — helped smooth over many of these difficulties, said Kenneth Mueller, a psychotherapist in the East Village who works with many Wall Street bankers and real estate developers. Now, he said, his clients “catastrophize” smaller bonuses or shriveling stock portfolios. “You have to remind them that there’s something that has always been there,” he said. “All the money helped mask the anxiety.”
The very wealthy can’t hide anything from their nutritionists and personal trainers, because they see the weight gain. Heather Bauer, a dietitian who works with many Wall Street executives who pay $600 to $800 a month for her services, says her clients have been eating and drinking more in the last six months. She sees results of this indulging each time they step on a scale, and in their journals that record what they’ve eaten.

The part I found most amusing was this

Other wealthy clients are cutting luxuries that they think their friends and relatives won’t notice, according to Mr. Del Gatto of Circa. At Circa’s midtown offices, he said, the seven consultation rooms have been busy with customers selling their precious gems. Some older couples, he said, are selling estate jewelry to help support their children who have lost Wall Street jobs. Bankers are paring down their collections of Patek Philippe watches. Wives from Greenwich and Scarsdale are selling 2-carat to 35-carat single-stone diamond rings. One recent client explained to Mr. Del Gatto that she was selling $2 million in diamonds she rarely wore, because her friends wouldn’t notice that they were gone.

Which brings me to Scarsdale. As everyone knows Scarsdale is probably one of the most prominent areas of Westchester. The taxes alone could make Donald Trump drop a load in his pants.

I have been hearing chatter about Scarsdale for the last 3 years that houses for sale are still lying dormant with nervous sellers on the sidelines waiting for a Christmas miracle. Unfortunately the information that I have been hearing has been purely anecdotal. And of the course official sources, like the town newspaper have put out the party line that everything is honky dory.

That is until now.

For the last couple of months I have been utilizing Hot Pads Foreclosures maps which has been quite useful. In a nutshell it uses color to determine the amount of foreclosures that are occurring in a region. If your blue your good and red your dead. It works just like the Homeland Security Threat levels.

Scarsdale for the last couple of months has been in the dark blue, which is pretty good but in my opinion for an area as wealthy as Scarsdale it should be ice cold. So yesterday, after reading the article on the woes of the rich, I did another foreclosure search and my jaw hit the ground.

SCARSDALE IS NOW GREEN! Yes. It has always been environmentally conscious but besides that. According to the foreclosure map, foreclosures are starting to rise. That is absolutely unheard in a town of this nature. But it appears the rich are not getting richer but are getting hammered along with the rest of the proletariat.

I knew this was going to get bad, but I didn’t think it was going hit these areas. So it appears there are some people in Scarsdale that are hocking their jewelry to pay for their mortgages, that is until they can sell. That is if that ever happens.

Monday, June 02, 2008

Ron Stenger: Homebuilder of few words.

This is an email I received from Barry of the Big Picture. NSFW for language.

What a charming gentleman:

Ron Stenger: Builder, Real Estate Sales, Class Act
Posted by Barry Ritholtz on Sunday, June 01, 2008 | 10:06 AM

Every now and then, I get a surprising email from a reader.

Here's today's special insight, from Ron Stenger, a reader in the home building andrealty sales field, written in response to our prior post on foreclosures.

Take it away, Ron:

Subject: Re: The Big Picture
Date: June 1, 2008 7:54:00 AM EDT
To: The big picture

Fuck u

Sent via BlackBerry by AT&T

-----Original Message-----
From: The Big Picture
Date: Sat, 31 May 2008 18:08:59
Subject: RSS The Big Picture

The Big Picture

Mortgage Delinquencies Accelerating
Posted: 31 May 2008 11:30 AM CDT

The mortgage crisis is bad and getting worse. The latest evidence suggests that any bottom in real estate is some ways off in the future: "Newly delinquent mortgage borrowers outnumbered people who caught up on their overdue payments by two to one last month, a sign that nationwide efforts to help homeowners avoid default may be failing.


Thanks for the feedback, Ron. I've seen pictures of the homes you build/sell, and I would have expected nothing less from you.

Given your class, leadership and professionalism, one is left to wonder how the home building and real estate industries ever ran into problems in the first place . . .

For more information, contact:

Ron Stenger Companies
5051 S. National Ave.
Springfield, MO 65810
(417) 889-4300
Fax (417) 889-0889

Let's give Ron a big hand

Sunday, June 01, 2008

Beyond disbelief, disgrace and tragedy


This absolutely f**king outrageous this collapsed even occurred. According to Curbed these a**holes have had a string of violations.

One comment
on Curbed pretty much summed up why this happened.

The clock is ticking on a recession and these developers have put big dollars and extreme pressure for these construction companies to rush. The construction companies are working illegal hours, cutting corners, doing everything possible to get the extra money for finishing ahead of schedule. The developers don't want to be stuck without a chair in the recession musical chairs, so we have to pay." [BREAKING: Crane Collapse on the Upper East Side]

This is just unacceptable. After what happened last time, the Bloomberg administration should have taken every measure to prevent this type of tragedy. I love Bloomberg. I really do. But at this point he should declare a lock down on all development sites with cranes and do a full body cavity search on all of these sites. Even the ones without violations. If these developers end up going belly up. F**k em. This is the business they chose and this is a risk they need to accept.

Meet Kimbo Slice.

Kimbo Slice is currently an MMA fighter who started out literally on the streets.


As you can see he is no joke. He gained a reputation on the street fighting circuit then ended up going professional. The smartest thing he did was hook up with Bas Rutten and so far that training has paid off. Which brings me to this.

There is a group of people who started sparring in Union Square calling themselves the Union Square Spartans.

Here is a link to their fights.

I have to admit it is fun to watch however these "fighters" are nowhere near the level of Kimbo Slice let alone any serious martial artist.

Some of you are going to call me out, saying that I am not "hardcore" or that I should "man up" and see if I have what it takes. My response to that is simply NO. Sparring is an integral part of any martial arts program. If your objective is to be able to defend yourself then you need not only how to hit but to take a hit. You also need to handle the adrenaline dump that comes from the fight or flight response. This is where sparring comes in.

But it should be done in a controlled environment where the proper equipment is utilized which includes a cup, mouthpiece, head gear and gloves. Sparring should be done in a ring or a padded area. The participants should not only be skilled in their respective arts and be able to utilize control but they should also be skilled in break falls because they are going to be hitting the ground alot. That is why I would never be so foolish to purposely put myself in that type of situation.

That is why I would never participate in this type of contest because there are too many variables. One wrong move in the concrete arena means a broken bone, tooth and if you fall on that surface, you might be looking at a concussion. Also the last place you want to grapple on is concrete.

For those fighting enthusiasts who say that sparring in a controlled environment is for p***ies and that sparring on the street is the only way to prepare you for a street fight should read this site.

Go to a boxing gym, dojang, dojo, kwoon, MMA gym where you can learn how to do this properly from professionals. There is nothing wrong with martial artists working out in a park, but the way these individuals are conducting themselves is problematic.

From a real estate perspective, this type of activity is not something that raises property values. For instance, what if people begin to bet on these fights? What if another party challenges the Union Square Spartans? An out of control sparring match on a hot summer day can lead to a world of hurt for everyone, especially near a crowd of innocent people.

It appears that the activities have caught the attention of the NYPD because now they have required them to get a permit to spar. Which is highly unlikely, so now they have gone to Tompkins Square Park. That is probably a better place to spart because they at least have soft ground to land on.