SPELLING CHA-CHING!

It's Official: America's Most Expensive Home Has A Brand New Billionaire Owner

By Morgan Brennan
 
Well folks, it’s official. The Spelling Manor, America’s most expensive home for sale, officially has a new owner. The sale of the $150 million Los Angeles, Calif. estate closed today and FORBES has the exclusive interview with co-listing agent Sally Forster Jones of Coldwell Banker Previews International. Forster Jones, who has more than $1 billion in sales to her name over the past decade alone, shared the listing with Rick Hilton and Jeff Hyland of Hilton & Hyland, an affiliate of Christie’s International Real Estate.

“We are sold, it is closed,” says Forster Jones. “It’s the highest broker sale in Southern California in the history of Southern California and Los Angeles.”

As with many other ultra luxury home sales, the brokers signed Non-Disclosure Agreements on the property, meaning they can’t divulge the final sales price or confirm the identity of the buyer. But we have good reason to believe it is Petra Ecclestone, heiress to the Formula One racing empire and daughter of British billionaire Bernie Ecclestone. Representatives of Ecclestone, 22, announced she was in contract on the 56,500-square foot mansion last month. Today The Wall Steet Journal reports that the opulent estate sold for $85 million, or at a steep 43% discount off the $150 million asking price.

The Spelling Manor, built by Candy Spelling and late TV producer husband Aaron Spelling, was on the sale block for two and a half years, maintaining that hefty nine figure asking price the entire time. Forster Jones says the sale transaction went very smoothly. Deals of this magnitude tend to be all-cash — something we strongly suspect to be the case with this transaction. The high-end home broker could not confirm the nature of the sale but she did assert that sales of trophy properties like this one, “tend to be cash-type buyers because they [the home buyers] are the ultra wealthy part of population.”

Forster Jones also notes that the property enjoyed a “tremendous amount of interest” and that, unlike for sale homes at lower price points, two and a half years is not a long time on the market. “This is a glitzy Hollywood property, but it is also very homey – all the potential buyers could picture themselves calling it home,” remarks the Realtor.

The Spelling Manor, originally named L’Oiseau, is situated on about 4.7 acres in tony Holmby Hills, an exclusive Los Angeles neighborhood. The three-story, seven bedroom estate boasts every outrageous amenity a celebrity or billionaire could imagine. Among the offerings are a dog grooming room, five bars, a wine cellar and tasting room, a China room for displaying ritzy server ware, a “gift-wrapping” room, a flower-cutting hall with professional florist fridge, a projection room, game and billiards rooms, a bowling alley, and a beauty salon. An elevator runs between the floors.

The lavish estate’s grounds encompass expansive gardens, an orangery, a koi pond, lamp posts imported from Paris, a pool complex and tennis courts. The fountain-studded motor court holds up 100 cars in front of the limestone mansion.

Ecclestone is said to be moving into the palatial pad following her August nuptials to James Stunt, a businessman and London nightclub fixture. It’s been reported that the couple will split their time between London and and their new SoCal digs.

Candy Spelling, mother to actress-turned-reality star Tori, was the home’s seller. She snapped up a $35 million penthouse apartment in Century City, a luxe L.A. high rise owned by billionaire Stephen Ross‘ Related Co. in December and relocated there shortly after. Forster Jones has represented the Spelling family on six real estate transactions and says Spelling is “wonderful to work with.”

The Spelling Manor joins the ranks of most expensive billionaire homes in the country with Yuri Milner’s $100 million Silicon Valley estate, and industrial billionaire Ira Rennert‘s hulking Fair Field Estate in the Hamptons, valued at $200 million according to tax assessments.

Its sale today sheds light on a growing trend in America’s ultra high-end housing market: foreign buyers. Forster Jones says foreign buyers, primarily from Asia, Russia, Europe and the Middle East, constitute roughly 75% of all showings she gives of her $20 million and higher property listings. Coldwell Banker Previews International’s $10 million and higher listings in the Los Angeles area have been enjoying a rebound this year. Twenty-seven homes worth $10 million or more have sold thus far in 2011, compared to 15 sales in 2010 and 12 in 2009. Many of them were purchased by foreigners.

DROP IT LIKE IT'S HOT

Canada home affordability drops, Vancouver pricier
REUTERS
Monday August 22, 2011

TORONTO (Reuters) - Housing in Canada became harder to afford in the second quarter, with Vancouver's pricey market playing a major role in the deterioration, according to a report by Royal Bank of Canada on Monday.

It was the second straight quarter in which the bank's quarterly Housing Trends and Affordability Index dropped. The cost of housing rose nationally across all the housing types the index tracks in the second quarter.

The index measures the proportion of pretax household income needed to service the cost of owning a home. A rise in the measure indicates a loss of affordability.

For a detached bungalow, the measure rose 1.7 percentage points to 43.3 percent. For a standard condominium, it edged up 0.8 percentage points to 29.2 percent, and for a standard two-storey home it climbed 1.8 percentage points to 49.3 percent.

Vancouver, which has long seen exceptional growth in home prices compared with other Canadian cities, directly accounted for up to one-third of the deterioration in affordability on the national score, the RBC report said.

"Vancouver's housing market is without a doubt the most stressed in Canada and is facing the highest risk of a downturn," said chief economist Craig Wright.

Other local housing markets were reasonably affordable or at worst, slightly unaffordable, the report showed.

Housing sector observers generally see the overall pace of housing activity, from starts to resales, slowing in the coming months, partly due to tighter mortgage regulations introduced earlier in the year and as pent-up demand gets absorbed.

(Reporting by Ka Yan Ng; editing by Peter Galloway)

OH, CANADA!

Housing market defies expectations

Garry Marr, Financial Post
Aug. 17, 2011

July proved to be a another strong month for Canadian home sales with the Canadian Real Estate Association now predicting 2011 will see an increase in sales as opposed to a previous forecast for a drop.

Actual sales last month were up 12.3% from a year ago while year-to-date sales are 1.6% lower than the same period for 2010.

Prices also continue to have some upward movement, al-beit some of the increase year over year being attributed to the introduction of the HST in British Columbia and Ontario, and tighter mortgage regulations in 2010.

The national average price for homes sold in July 2011 was $361,181 - the lowest level since January - but rep-resented a 9.3% increase from a year ago.

Greg Klump, chief economist at CREA, cautioned not to read too much into the average price statistics.

"Changes in the national average home price are open to being misinterpreted," Mr. Klump said. "They often signify changes in the mix of sales activity across and within local markets, rather than a rising or falling price trend for typical homes in a specific market."

However, the Ottawa-based group, which represents 100 boards across the country, says the scales have now tipped modestly in favour of 2011 outpacing 2010.

CREA is predicting 450,800 sales in 2011, just under a 1% increase from a year ago. The group had been forecasting a decline of 1%. Sales are expected to drop less than 1% in 2012.

Prices in Vancouver continue to affect the country, as they helped push CREA's forecast for the average sale price in 2011 to $363,500, a 7.2% increase from a year ago. This was also an increase from a previous forecast. Next year, prices are expected to be flat.

The group noted longtalked-about increases in interest rates have failed to materialize in the market.

"While there had been some talk of potential interest-rate increases, that hasn't happened," said Gary Morse, president of CREA. "In fact, rates have actually come down, and are now expected to remain low for the remainder of this year and into 2012."

Douglas Porter, deputy chief economist at Bank of Montreal, said the housing market just seems to keep surprising everybody.

"In a world seemingly awash in negative economic surprises in 2011, one positive surprise has been the resiliency of Canada's housing market," said Mr. Porter, adding few analysts were predicting the kind of price increases the market has seen.

"Canadian housing remains surprisingly robust, thanks to still-low interest rates and solid job growth. While the recent financial market turmoil may temporarily weigh on activity, sales should ultimately find support from continued exceptionally low borrowing costs."

Phil Soper, chief executive of Royal LePage Real Estate Services, said his company's recent forecast was for a 2% decline in sales and 3% increase in price for 2011. He doesn't anticipate that changing.

"I think we're going to start to see it's not so much the strength of the market but the weakness last year. The market had run out of steam at this point last year," Mr. Soper said. "I think we are seeing a more normal curve to the market, with the exception of the Vancouver market."

A GOOD BUY IN CALGARY?

Calgary housing among most affordable
By Mario Toneguzzi
Calgary Herald August 23, 2011

Owning a home in Calgary may be expensive for many people but a report suggests housing affordability in the city is among the lowest in the country for major centres.

And with interest rates now expected to remain at a low level, Calgary's affordability will continue to be remain that way, say industry experts.

A report by RBC Economics, released Monday, said Calgary's housing affordability actually deteriorated in the second quarter of this year compared with the previous quarter but affordability in the city is better than the national average for detached bungalows, standard two-storey homes and standard condominiums.

Sano Stante, president of the Calgary Real Estate Board, said prevailing negative economic conditions will restrain any increases in interest rates for awhile.

"Those are increases that we fully expected prior to these events and they've now been abated," said Stante. "That was our biggest risk of deteriorating affordability.

"With an assurance that interest rates are going to stay low for the next 12 months anyway - and there's somewhat of an assurance of that - then it really looks like we're going to lead the nation in affordability especially when we start to get increased employment and in-migration towards the end of this year. That should really lend to a more robust real estate market."

Robert Hogue, senior economist with RBC, said he too expects Calgary's affordability to remain about the same.

"Previous to a few weeks ago we expected higher interest rates would start really putting more and more pressure across the board in Canada including in Calgary on the monthly costs of home ownership," he said. "Now we've pushed everything out to the middle of next year. "

The RBC Housing Affordability Measure, which has been compiled since 1985, shows the proportion of median pre-tax household income that would be required to service the cost of mortgage payments (principal and interest), property taxes and utilities. The higher the measure, the more difficult it is to afford a house. For example, an affordability measure of 50 per cent means that home ownership costs take up 50 per cent of a typical household's pre-tax income.

In the second quarter, Calgary's measures were 37.1 per cent for a detached bungalow, 38.5 per cent for a standard two-storey, and 23.0 per cent for a standard condominium. The measures increased by 0.6 per cent (bungalow), 1.1. per cent (twostorey) and 0.4 per cent (condo).

However, they are lower than a year ago by 3.1 per cent for a bungalow, 2.9 per cent for a two-storey and 1.6 per cent for a condo.

Housing Affordability Q2 2011

Detached bungalow

Legion Avg. price YoY chg. Affordability* Q/Q chg.

Canada $347,600 5.2% 43.3% 1.7%

Alberta $339,500 -2.6% 32.8% 0.7%

Calgary $411,700 -2.0% 37.1% 0.6%

Standard two-storey

Canada $393,100 5.0% 49.3% 1.8%

Alberta $370,300 -1.1% 36.4% 1.3%

Calgary $415,200 -1.6 % 38.5% 1.1%

Standard condominium

Canada $230,000 3.4% 29.2% 0.8%

Alberta $216,200 1.0% 21.3% 0.5%

Calgary $249,000 -1.1% 23.0% 0.4%

*Shows the proportion of median pre-tax household income that would be required to service the cost of mortgage payments (principal and interest), property taxes and utilities. Source: RBC Housing Trends and Affordability report

GOTTEN GAINS

Condo market gains strength
By Kathy McCormick, Calgary Herald
August 6, 2011

The story of the resale condo market in Calgary is positive, albeit fragile, say some of the city's realtors.

For the first time since April 2010, sales of resale condos have gone up year-overyear - and in terms of new condos, several inner-city highrise projects that were in limbo have been brought back to the market.

For April 1 to the end of June, sales of resale condos reached 1,617 within the city.

The Calgary Real Estate Board's Zone C - which roughly corresponds to the city's southwest and includes the Beltline - posted the most sales from April 1 to the end of June at 881.

Not surprisingly, the busiest communities during that period were in the innercity neighbourhoods of Connaught with 95 sales and Victoria Park with 50 sales.

"Condo sales bounced back this month (in July) and we now have less than four months of supply on the market," says Sano Stante, president of the Calgary Real Estate Board. "Stronger condo sales, combined with a decline in inventory, will lend more balance to this market in the months to come."

The key, though, is prices, says Marlene Swinton of Real Estate Professionals Inc.

"Buyers today are extremely nervous and a lot of them come in well below list price," she says.

"A lot of sellers, on the other hand, haven't recognized that prices have changed. They don't want to hear that the marvellous prices they heard they could get for their place once isn't there anymore."

That resonates with Chris Zaharko of Royal LePage Foothills. "My gut feeling is that people are only in the position to buy and pursue it if they think it's the absolute bottom line."

Prices during the second quarter of the year averaged anywhere from $77,600 for five sales in Forest Lawn in the board's Zone B - which roughly corresponds to northeast Calgary - to $850,000 for one sale in Bayview in Zone C.

But overall, affordability was key. A total of 30 communities within Calgary had average sale prices under $200,000 - with more buyers purchasing condos under that price range this year compared to last year during the same period.

"Buyers in this market expect value and many are taking advantage of some affordable buys in both the single-family and condo markets," says Stante.

He expects this fall to be more active. "I think as the inventory is absorbed, more particularly in condos, the shift will be to sellers and there will be slight increases in price."

Swinton, who has a condo apartment building of 11 units among her portfolio of properties for sale, says she had three calls for showings for that development on the last weekend of Stampede - traditionally a very slow time for real estate transactions.

"It was priced well and a good product, but still, that is investors looking to buy, so that's positive."

Zaharko, too, points to the new condo market where several highrise developers are starting marketing or re-starting projects that had been on hold during the downturn in the inner city.

"The big developers are coming back to the table," he says.

"They've got their pulse on the market, and see what the oil and gas industry will be doing in the next couple of years. The timing is right to start now."

Typically, a highrise project can take two years or more for construction to be complete.

Zone C, which is mostly southwest Calgary and the inner-city neighbourhoods in the Beltline, was not surprisingly the most active for resale condos in the second quarter.

It also had the highest average price and highest median price at $317,301 and $285,000 respectively. The median price is the mid-point of all sales.

Overall, most condos took an average of 54.5 days to sell - but if it's the right product at the right price in the right location, it will sell quickly.

A $835,000 condo in Eagle Ridge in Zone C, for example, sold in just nine days during that period; another condo in Citadel in Zone A went for $440,000 in just four days.

PERMIT TO SOAR

Calgary building permit values soar in July
Up 43 per cent from a year ago
By Mario Toneguzzi
August 8, 2011

CALGARY — The estimated construction value of building permit applications in Calgary soared in July compared with a year ago.

The City of Calgary says the value ballooned to $328 million for the month, up 43 per cent from July 2010’s $229 million.

It is also up three per cent compared with the five-year average of $318 million and an increase of 15 per cent compared with the 10-year average of $284 million.

In July, residential values were up 41 per cent from a year ago to $189 million while non-residential values were up 47 per cent to $139 million.

“The residential increase for July building permits goes across all sectors – single family, garage, two family, apartment and townhouse,” said David Watson, general manager of planning, development and assessment, said in a news release. “In the non-residential categories, values were highest in the commercial sector whereas there was a marked decrease in the government and institutional sectors for new construction.”

Year-to-date ending July 31, total values across all categories are up 44 per cent over the previous year to $2.7 billion compared with $1.8 billion in 2010, said the city, with the residential category up eight per cent to $1.2 billion and the non-residential category up 96 per cent to $1.5 billion.

The non-residential values are significantly higher than 2010 due to a major airport terminal improvement project valued at $600 million from January.

Major projects for July included three new apartment projects valued over $10 million (St. John’s Tenth Street at $26 million; Mikkelsen House Phase 1 at $14 million; Panorama West at $11 million), a $18 million senior citizen home improvement (Bow view Manor) and two new warehouse/storage facilities (HCP Phase II Building ‘A’ at $18 million; Canada Post at $10 million).

LOOK TO THE SKIES!

Spectacular aurora activity near Calgary

Dr. Robert Berdan, Calgary nature photographer and U of C assistant professor, took these remarkable photos about 2 a.m. on Aug. 6. At about 7 p.m. the evening before, an aurora alert was issued by the University of Alberta indicating there was a 70% chance of auroral activity in the southern prairies including Calgary. Berdan says, "I headed out at 10:30 p.m. to photograph the aurora and local thunderstorms and stopped on Township Road 252 near Cochrane and photographed the aurora until 2 a.m. Getting bright auroras this far south is a relatively rare event. However, the Aurora is nearing its 11 solar max."

Source: Calgary Herald

WANT TO GO STEADY?

Canada property results improve on deals, leasing
Reuters August 5, 2011
By Ka Yan Ng and Amruta Sabnis

TORONTO/BANGALORE — Canada’s biggest office and retail landlords reported strong quarterly results on Friday, boosted by acquisitions and long-term leasing renewals.

Brookfield Office Properties and RioCan Real Estate Investment Trust REI said funds from operations, the most closely watched performance measure for REITs, rose in the three months to the end of June.

Even so, activity for the Canadian companies could slow if a flagging global economy makes it more difficult to raise capital and complete deals. “We’ve had a ton of acquisition activity and capital raising going on over the last two years,” said Karine Macindoe, an analyst at BMO Capital Markets.

“This market environment is probably going to slow some of that down because … share prices are far more volatile and declining.”

Canada’s resilient economy, rising rents and easy borrowing are fueling a buying spree among real estate investment trusts, highlighted last month by the largest office property deal ever by a Canadian REIT.

STEADY EXPANSION

The second quarter revealed few signs of weakness. Brookfield, a major office landlord in Manhattan and other North American cities, reported a 23 percent jump in leasing activity. It leased 1.6 million square feet of space, compared with 1.3 million square feet leased a year earlier.

FFO rose to $166 million, or 30 Canadian cents a unit, from $156 million, or 30 Canadian cents, a year earlier. FFO strips out the effects of depreciation and other factors from the earnings of property companies, giving a more telling quarterly reading. RioCan REIT, Canada’s largest landlord of retail space, also turned in a strong performance.

FFO rose 12 percent to $93-million, or 36 Canadian cents a unit, from $83-million, or 34 Canadian cents, a year earlier. RioCan has steadily expanded its portfolio in Canada, while looking for opportunities for growth in the United States for more than a year. “RioCan’s acquisition platform remains on track to meet our objectives for the year,” Chief Executive Edward Sonshine said in a statement.

“RioCan has been able to take advantage of historically low interest rates to generate solid growth through acquisitions, development, and increased occupancy and rents.” It renewed 1 million square feet during the quarter at an average rent increase of 13.9 percent, or $1.99-per square foot. It also added five properties in the quarter. In July, Dundee Real Estate Investment Trust said it is buying 29 properties from U.S. private equity giant Blackstone Group for $831.8-million. It was the largest deal ever for a Canadian REIT.

RioCan’s units were up 0.6 percent at $25.05 on the Toronto Stock Exchange. Brookfield shares were off 0.3 percent at $16.80 on the Toronto Stock Exchange, but its New York-listed shares were up 1.35 percent to $17.26.

Photo By: mb17chung