9 Kasım 2009 Pazartesi

Today Post::DJ AM's Beverly Hills House Hits the Market

SELLER: DJ AM
LOCATION: Anthony Place, Beverly Hills, CA
PRICE: $3,795,000
SIZE: 3,375 square feet, 4 bedrooms, 4.5 bathrooms
DESCRIPTION: Private and gated mid-century located on a cul-de-sac street with canyon and city views, rich mahogany floors, custom built-in theater, Crestron system and flat screen TV’s throughout, two-sided fireplace, office, large kitchen with stainless steel appliances and carrerra marble countertops, four bedrooms and 4 and one-half baths, open floor plan looks! out to lushly landscaped backyard with pool and spa.

YOUR MAMAS NOTES: It was only in late August of 2009 that Adam Goldstein–better known as DJ AM–was found dead of an accidental drug overdose in his New York City apartment. The formerly fat celebrity DJ battled both weight and drug addiction in his youth, but had slimmed down and been sober for well over ten years before slipping down the sad and slippery slope of crack cocaine in the days before his death. Some reports have speculated that AM picked up the pipe because he was all kinds of broken up over his alleged bust up with model Hayley Wood. Other reports speculate that AM was still saddled with the weighty psychological residue of the September 2008 Learjet crash which killed four people and left AM and his friend/collaborator Travis Barker seriously injured. Whatever the reasons, the celebrity spinner was well-liked by all those! who knew him, including Your Mama who became friendly–but not friends–with AM after we dished on the purchase of his house in Beverly Hills, CA back in April of 2007.

It is this house, located way up in the Hills of Beverly on Anthony Place we would like to discuss again because it was recently listed–presumably by the executor of his estate–with an asking price of $3,795,000. Property records and a little inside information from a Beverly Hills real estate insider indicates to Your Mama that the single story residence was purchased by AM in June of 2006. This was just before he and Nicole Richie broke up and before he took up with actress Mandy Moore. Property records and information provided to Your Mama by our Beverly Hills real estate insider reveals AM forked over $3,225,000 for the approximately 3,375 square foot residence.

At the time of the purchase, the walled and gated residence had been renovated but it appears to Your Mama that AM made a few aesthetic tweaks to both the interior and the exterior which included some new landscaping at the front of the house and around the swimming pool and wrapping wood around the top portion of the double sided fireplace in the living room.

The glass front door opens to the entrance hall which leads to the main living space, comprised of an open plan living/dining area with gorgeous, shiny mahogany floors, a flat screen tee-vee mounted above the fireplace and wood framed sliding doors that open to the pool terrace. The large eat-in kitchen has a built in breakfast table, mac-daddy appliances including an 6-burner Viking range with a griddle, and sleek, and flat fronted chocolate brown cabinetry topped by Carrara marble counter tops. Not the most practical choice those counter tops, but golly they look nice, don’t they?

AM’s home office, located off the entrance hall at the front of the house, shares the double sided fireplace with the living room and includes a full wall of book shelves and another wall mounted flat screen tee-vee. The custom built theater has been outfitted with a gigantic movie screen, a chocolate brown coffered ceiling, cocoa colored suede walls and seven very plush looking chocolate brown reclining leather seats.

A long hallway lined with built in bookshelves along one side leads to the bedrooms, each of which appears to have a private pooper. The modestly sized master suite, which has custom fitted closets where AM probably kept at least some of his 600+ pairs of sneakers, has been decorated in various shades of brown and beige and includes more of those amazing mahogany floors and a muscular, clean-lined bed with an upholstered headboard, overhead lighting and a thick cabinet at the foot of the bed out of which glides a flat screen tee-vee at the touch of the button. We don’t have any idea what AM watched on his tee-vee while lounging in his bed, but we always think of these sorts of boob-toobs that rise mysteriously from the foot of the bed as being a porn fanatics dream tee-vee.

The back of the house opens to the wee back yard which has a small, multi-sided swimming pool, a spa and long views down the canyons, over the city of Beverly Hills and towards the towers of Century City. More photos of AM’s crisp and clean hideaway can be seen here.

With the blessing of AM’s family, MTV decided to begin post-humously air the 8-episode Intervention-like reality tee-vee program called Gone Too Far that AM wrapped just days before his death. The program, hosted by AM, began airing on October 12 and focuses on the lives and struggles of young addicts.

Property records reveal that the New York City condo where DJ AM died–located on the 7th floor of a glassy Richard Gluckman designed building on Lafayette Street–was purchased by the super successful scratcher in November of 2007 for $1,995,000. The apartment is not currently listed for sale on the open market, but Your Mama has to assume it won’t be long before that place is also put up for sale.

RIP DJ AM.

Today Post::The problem with Goldman bonuses

Beyond the generic problem that bonuses are usually based on an un-risk-adjusted IRR, the problem with bonus for banks in general, and Goldman in particular, is that the government is backing short-term bank borrowing, and so banks can borrow at very depressed rates and make a lot of money on spreads. This seems more like playing the government than playing the market.

Today Post::Two Great Bounces! - November 06 2009

The following charts provide a simple comparison between the big stock bounce that occurred in the wake of the DOW crash of 1929 and the bounce we are seeing today in the S&P 500 index.

The method of alignment was simple… take the first definitive up trading day off the bottom of the preceding bear market low and set that as the start of the series… then simply re-base both series to a value of 100 so that they can be compared side-by-side.

The lower bar chart plots the cumulative percentage change since the start of each bounce.

The S&P 500 is up over 48% in a little over 160 trading days… an historically aggressive run with an obvious note of mania to it… and wholly comparable to… even far stronger than… the price movement seen in the 1930s-era DOW rally.

At this point for the 30s-era DOW, the bull-run was over as the bear trend resumed in earnest… today though the Bull is seriously on the move… how long will this boom last?

Only time will tell… But for now, let's continue to keep a watchful eye…


Today Post::Fighting the last war

At the ULI meetings, I am hearing that banks are not willing to repeat their behavior in the last down market (the early 1990s): they are afraid that if they sell their assets–commercial real estate loans–at a discount, they will miss out on upside opportunity. Instead, they are “extending and pretending,” in the hope that values will rebound to levels above mortgage balances. I overheard one person say, “cap rates have to go back down again. right?”

Not necessarily. This paper by Phillip Connor and Yougo Lang shows that cap rates tend to stay in the eight range over the long term–to think they will return to the fives is almost certainly unrealistic. Even if net operating income had stayed constant–and it has fallen–the increase in cap rates from 5 to 8 implies a 37.5 percent reduction in value. It is going to be a long time before loans with LTVs at origination in excess of 75 percent will be right-side-up again.