Hong Kong Luxury Real Estate

$57 Million as a sales price for a Hong Kong apartment?

What if I had $57 million to buy a luxury home in the U.S.?

I would seriously have to consider a currently-available 10,000 square foot home right on the beach in Del Mar, just north of La Jolla. The climate couldn’t be more perfect, the views are spectacular, while snow-covered mountains and desert golf are just a couple of hours away. But then again, I am a big fan of (and a Realtor in) San Diego!

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I love the genius behind Dyson engineering and products.

Instead of thinking outside the box, these air gurus study the box very closely and re-engineer it into device that works better than its predecessors.We love the Dyson vacuums and find them intuitively simple to use.  They are also nearly indestructible.  The Dyson wizards have also invented a hand dryer that really works–with air that travels in the neighborhood of 400 mph.

A tip of the top hat to Paul Taylor with the Financial TImes, who released this story whereby inventor James Dyson claims his bladeless fan–or the Dyson Air Multiplier,  works by forcing a jetstrem of air out of a narrow circular slit and then over an aerofoil-shaped blade, and is proving to be at least as efficient as its bladed counterpart, while reportedly being more comfortable and much safer.

The Dyson fan is controlled with a remote slider, which allows for more precise air flor. The cost ranges from a hefty $300 for the 10-inch model and $330 for the more powerful 12-inch air multiplier.

The fan, or air multliplier, is reportedly and currently available at select specialty stores in the US–and will hopefully soon be available on the Dyson site as well as Amazon.

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States Losing Millionaires

Yesterday, the Associated Press reported that millionaires are fleeing their luxury homes in New York to establish residency in less-taxing states. As a result, New York is receiving far less revenue than was expected from the wealthy since these wealth taxes were enacted last April.

Call it the law of unintended consequences.

To be fair, many of these losses come from scaled-back salaries and layoffs on Wall Street, but more than a few may be packing up and moving to more tax-friendly states such as Florida, Nevada and elsewhere–and are taking jobs with them. It is reported that billionaire Buffalo Sabres owner Tom Golisano who was paying $13000 a day in New York income taxes has moved to Florida. With him go 5000 jobs from Paychex, the Rochester, NY payroll processing company he owns. Rush Limbaugh has also given up his Manhattan home to escape excessive taxation.

Donald Trump tells Fox News that a number of his millionaire friends are also thinking of bailing from New York because of excessive taxation. Says AP:

“States also realized that having a higher tax rate than their neighbors would cost them talent, lose jobs and hinder economic growth, the foundation reported in May after Hawaii joined Maryland, New Jersey, California and New York to adopt a “millionaire’s tax.” New York, for example, has been careful not to raise its highest rates above New Jersey’s, according to the foundation.”

In California, millionaires and job producers are already being heavily courted by Nevada, a state that is seeking to grow its employment base and fortunes with its minimal taxation and business-friendly environment: Click here to view the embedded video.

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One of our readers, Kirstie Birkewitz, is not only a writer, but co-owner of a careful moving company in San Diego–and has some excellent tips for luxury home relocation

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Most of us grew up believing that education and earning power were irrevocably shackled to each other, and where one went, the other inevitably followed.

These days, we’re no so sure.

Below, a partial list of billionaires who dropped out of school and went on to become outrageous successes in the technology, entertainment and fashion fields.

1.  Sir Richard Branson dropped out of high school at the age of 16 and soon founded both Virgin Records and Virgin Atlantic Airways–as well as 300 other companies. He also bought a 79-acre Caribbean Island at the age of 24

2.  Kirk Kerkorian is a Las Vegas Legend with big stakes in Bellagio, Excaliber, Luxor, Mandalay Bay, MGM Grand, New York-New York, Circus Circus, The Mirage, and more. He dropped out of school in the 8th Grade.

3.  Bill Gates, founder of Microsoft, needs little introduction. He and wife Melinda are world-class philanthropists in addition to being the wealthiest couple in the world. Most of us know he was a Harvard dropout who couldn’t resist teaming up with:

4.  Paul Allen, co-founder of Microsoft who dropped out of Washington State University to join buddy Bill in their MS venture. He ended up with over 100 million shares of Microsoft and today owns 12 pro sports teams, lots of real estate, and big stakes in other tech and media companies including Dreamworks Studios.

5.  Steve Jobs dropped out of Reed College after just one semester and went on to found Apple Computer and become the largest shareholder in Disney Studios. A dropout earning $1 per year might have bolstered my parents admonishments, were it not that Mr. Jobs also owns 30 million shares of Apple plus perks.

6.  Larry Ellison, flashy founder of Oracle, dropped out of Illinois’ University of Urbana-Champaign (as well as the University of Chicago) and in 1977 invested $2000 to start Oracle Corporation, which is today the second  largest software company in the world. He also pilots his own jets.

7.   Michael Dell dropped out of the University of Texas at Austin after starting a little computer company he called PC’s Unlimited. Wildly successful, this dropout went on to develop Dell Computers into a name with worldwide recognition.

8.   David Geffen, a beacon in the entertainment industty, was another University of Texas at Austin dropout. He was also a cofounder of DreamWorks–and likely shares genius and coffee with Paul Allen (above).

9.  The Ralph Lauren name has become an icon in the fashion world. The City College of New York dropped out and founded the Polo Ralph Lauren brand. He reportedly got an early start, though, by selling neckties in high school where he declared his intentions to become a millionaire.

10. Sheldon Adelson is a casino legend/kingpin and Wall Street wizard, who is also a City College of New York dropout. He is CEO of the Las Vegas Sands Corp which also holds the Venetian Resort Hotel Casino and the Sands Expo and Convention Center. Adelson also help found the COMDEX computer trade show.

Any other notable billionaire dropouts we failed to mention?  Also, where are the women?

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Bernard Madoff

The Bernie Madoff, who is headed for several lifetimes in prison–and which leads us to wonder:

Where are the cushiest prisons?

And wouldn’t you know, Forbes.com provides a timely list of the top-rated federal prisons. They looked for such amenities as email, proximity to major airports, weather and internal substance-abuse programs, a sentence-reducing ploy used by non-addicted white collar criminals. Other qualifiers for the luxury prison list include pleasant guards, air-conditioned off-site employment, vocational training and weekend family visits.

Madoff’s first choice (though not at the top of Forbes’ list), was the Federal Correctional Institution at Otisville, N.Y, which serves Kosher food and is closest to his family.

That was not to be the case, though.

Madoff was instead sentenced to Butner Federal Correctional Institution in Butner, North Carolina, which ranks 9th on Forbes’ list.

Top rated? The Alderson, West Virginia Federal Prison Camp where Martha Stewart served her sentence. Others include:

• Federal Prison Camp, Pensacola, Florida

• Federal Prison Camp, Yankton, South Dakota

• Federal Correctional Institution, Sheridan, Oregon

• Federal Correctional Institution, Memphis, Tennessee

• Federal Correctional Institution, Dublin, CA (women’s facility)

• Federal Correctional Institution, Ashland, Kentucky

• Federal Correctional Institution, Buttner, North Carolina

• Federal Correctional Institution, Otisville, New York

And for what it’s worth, there are a total of 115 federal prisons in the United States.

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We are seeing luxury scaled down on many fronts, and luxury hotels and timeshare resorts are taking it on the chin as well.

For the first five months of this year, according the the Wall Street Journal, U.S. hotel occupancy has declined 53 percent. This is the lowest drop in occupancy since 1987, when Smith Travel Research began tracking these numbers.

While both luxury and budget hotels are ailing with declining revenues, those hotel investors suffering the most (just like homeowners) are the ones who bought their real estate at the top of the market with loads of debt. Defaults on these hotel loans have spiked, and securitized mortgages (where loans are chopped up and sold to different investors as bonds) are also expected to rise from 4.7 percent to over 8 percent by year’s end, according to Morgan Stanley.

Timeshares are faring not much better. The biggest timeshare operator in this country, Wyndham Worldwide Corp has seen timeshare sales plunge 39 percent from a year ago. Another big loser is Marriott International, whose timeshare business reported a $17 million loss in the first quarter of this year.

And then we have luxury hotel operators like Four Seasons, which manages a number of luxury hotels, and is facing pressure from hotel owners to discount room rates in response to economic pressures. Recently, the owners of the Aviara Four Seasons Resort in Carlsbad, CA (north of San Diego) tried to divorce themselves from Four Seasons, who have a 30-year management contract with Broadreach Capital Partners of Palo Alto, CA. The owners are trying to preserve financial viability, while Four Seasons is trying to protect its non-discounting luxury reputation–and its contract.

Four Seasons, incidentally, was the only luxury hotel not to discount room rates after the 9/11 terrorist attacks. This was broadly seen as a brilliant move. Four Seasons, with its 82 hotels around the world, maintained both its profitability and its luxurious reputation.

These harsh economic times, though, are weighing heavily on the luxury hotel market. Their fixed costs are higher with staffing, valet service and maintenance–while corporate travel has shrunk and leisure travelers are bargain hunting. This has caused many hotel operators to discount room rates and offer bargain travel packages.

This is a market that surely has not only the venerable Four Seasons on guarded watch, but also the Ritz Carlton, the St. Regis and other five-star destinations throughout the world.

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(It is with sadness that we learned of Michael Jackson’s death due to a heart attack this afternoon, apparently at his Holmby Hills mansion.  In the days ahead, many will be wondering about the fate of Neverland. Our prayers and kind wishes are extended to the Jackson family.)

Over two years ago, we were speculating about the fate of Michael Jackson’s Neverland and wondered if it would become a Ghost Land instead. The animals were gone, helicopter landing pads were still–and recently, according to the Wall Street Journal, bats took to hanging from the doorway over Jackson’s once-famous gaming arcade, leaving piles of guano below.

Thought Neverland could never come back to life? Well, never say never.

A year or so ago, Michael Jackson defaulted on his $24.5 million mortgage which was bought for $23 million by a Los Angeles investment group. They, in turn, formed a private partnership with Jackson with the intent of bringing Neverland to a fruitful investment. There is speculation that the Santa Barbara County property could eventually and realistically be worth $70 to $90 million.

In the meantime and to date, Colony Capital LLC has spent over $3 million and hired 80 workers to rehabilitate Neverland. Electrical and plumbing systems are being brought up to date, and landscaping is being redone. The Neverland gates, amusement rides and zoo may be gone, but evidence of Neverland’s former glory remain–including two railway lines , a 50-seat theater and the English Tudor-styled buildings.

Michael Jackson paid $19.5 million for Neverland in 1987 and poured hundreds of million into it over the next 18 years. In 2005, after Jackson was cleared of child molestation charges, he swore he would never return to Neverland. The estate was abandoned in July of that year and was reported to have been subsequently marketed to David Beckham and his wife, Victoria (Posh Spice). The price tag expected in those heady real estate days?

$50 million.

Neverland may have been decimated not so much by Michael Jackson’s legal troubles, or even its eventual neglect, but by market conditions that have decimated property and home values all over the country. And perhaps Neverland’s sale at $23 million simply reflects a market bottom–of sorts.

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But had I draped a black cloth over it on April 24, 2009 you might have understood. That’s the day my Dad and best friend died in Encinitas, CAafter a lengthy illness. It’s really tough to become an orphan when the last parent exits–especially if the relationship has been a close one. I shared this loss equally with my sister Gayle, in Houston who also misses the sage advice and counsel of our patriarch.

Our mother, Edith Michelson, died in 2006. Her husband of 59 years and a heroic pilot of three wars, Retired Lt. Col Robert Michelson, would spend the next three years of his life gently encouraging the dreams of his two daughters and five grandsons. On a personal level, Bob Michelson in his 80’s also abandoned a lifetime of agnostic views, and to our absolute amazement, developed a wondrous faith in God the last two weeks of his life.

He was also enormously curious about new technologies. Dad was the first person I knew to download Window’s Vista–and wished for stem cell technologies that might one day cure his own illness as well as those of others. He loved our country, watched Wall Street closely, was an Astros and Padres fan, and hated Nancy Pelosi. Dad’s idea of a perfect meal would be a bowl of spicy bean soup and a crusty piece of bread. He was modest, generous to a fault, and promised to be a guardian angel for us all.

We miss him terribly.

And that is probably why my writing gears have been frozen this past month or so. And though our real estate business continued and even flourished, I just couldn’t bring myself to write about San Diego real estate, market conditions or luxury homes–and remain indebted to my husband and partner Mike as well as associates in our company who so kindly aided me and our clients during this personal and unprecedented period of grieving.

I spoke with a Philadelphia food writer a week or so ago and she could not understand how I could abandon writing during this grieving period–because writing would be her salvation. I didn’t write because I feared alienating you with my sadness and the process of putting a deceased parent’s affairs into final order. At the same time, I didn’t feel able to write about the things I usually favor because of this big life transition. A simple diagnosis might be writer’s block. And that is something that just has to work itself out.

Those writing gears, though, have begun to thaw and life’s rhythms are returning to normal. Laughter is easier, tears have subsided and reconnecting with friends–and you– is now a priority. It feels good to be home. –Roberta Michelson Murphy

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According to Forbes.com, now may be the best time to make some of those major purchases wise shoppers have been putting off for so long, particularly if one has the luxury of capital.  The Forbes list:

1. Homes. Low prices fueled by foreclosures and short sales, coupled with low interest rates and possible income tax credits, make this an opportune time to shop real estate.

2. Cars. Automobile dealers are dealing as never before: 0 percent financing, big cash rebates and other incentives make for some historic deals. Even used car prices are down 10 percent from a year ago.

3. Vacations. Las Vegas hotel room rates are down an average of 34 percent from a year ago, cruises are offering some amazing bargains, like $1000 per person for summer week-long Alaska cruises (including airfare).  Airlines are also offering some bargain fares.

4. Toys. Prices for playthings are headed down this summer and are expected to stay down for holiday shopping.

5. High Dividend Stocks. With the S&P down 40 percent (more or less)  from a year ago and the prospect of inflationary times ahead, now may be a great time for the courageous investor to pick up some stock bargains that have a history of divident payments.

6. Laptop Computers. Prices for laptops are falling, thanks in part to recent buying activity in those handy little netbooks. Computer deals abound almost everywhere.

7. Diamonds. The recession has dulled even the diamond market, with prices for polished diamonds down an average of 14 percent from their highs last summer.

8. Clothing. Men’s and women’s clothing are filling the clearance racks. Remember how Saks Fifth Avenue started their 80 percent off sales before Christmas last year?  There are lots of bargains, especially with more expensive lines.

9. Televisions. We recently had to replace a large flat panel television, and were blown away with the replacement price at Costco.  As more manufacturers enter the flat panel TV business, prices are drooping precipitously.

10. Furniture. With fewer people buying homes, furniture sales have drastically fallen off. Many furniture retailers are going out of business and clearance sales are driving much of the home furnishings market.

As a San Diego Realtor, I find it interesting that Forbes put real estate in the number one position–and cannot help but recall Baron Rothschild’s famous saying, Buy when there’s blood in the streets.

How much blood is the question….

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