PALM BEACH ECONOMY WORSENING

PALM BEACH REAL ESTATE - bad..... worse NEWS

The news is getting worse. The latest sales (as of February 2009) indicate the "fall" of the last bastion in U.S. real estate.

Has the RECESSION reached PALM BEACH? Home sells for millions less than peak asking price


By MEGAN V. WINSLOW
Palm Beach Daily News Staff Writer

Wednesday, February 11, 2009


Last week's sale of a new island home at a discount of more than $4 million off the peak asking price could be a sign of the times - or a sign the price tag was initially inflated, real estate professionals associated with the deal said.

Novice developer George L. Ford III's Mediterranean-style house at 756 Slope Trail sold for $5.96 million, down from a $10.3 million peak in December 2007, about the time it was first openly marketed.


The five-bedroom, 6 1/2 bath residence is situated atop a hill next to the town's historic Art Deco-style water building, and it overlooks the Palm Beach Country Club golf course.

According to the warranty deed, the new owner is Christopher Dacamara Orthwein, son of Adolphus Busch Orthwein, former vice president of operations for Anheuser Busch Cos.

Michael Montgomery, of Jeffrey A. Cloninger & Associates Inc., represented Orthwein in the sale, and Scott Gordon, of Fite Shavell & Associates, represented Ford.

Gordon said the poor economy might be to blame for the price reduction.

Gordon said the price started at $8.9 million before rising to $10.3 million and then dropping to the final asking price of $7.99 million.

A year ago, Ford had a "much better offer" but turned it down, Gordon said, declining to elaborate.

Still, $5.96 million - $6.45 million with all the added fees - is "a good price" for a newly constructed home in a slow market, Gordon said.

The home's 6,140 square feet of living space translates the final sales price into more than $1,000 a square foot, he said.



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Developer delays mansion work, says proceeding would be foolish

By JEFF OSTROWSKI
Palm Beach Post Staff Writer

Monday, February 16, 2009



When an eternal optimist like Frank McKinney says he's scared, you know times are tough.

The flamboyant developer has delayed construction of two oceanfront manses in Manalapan until the global economy recovers. McKinney had planned to build a $125 million castle and a $30 million estate on vacant land he owns just south of the Ritz-Carlton.

But now that the luxury market no longer is bulletproof, McKinney acknowledged that pushing forward would be "foolish."

"It's a pretty scary time - I know I'm scared," McKinney said last week. "This is the first time I have seen the wealthy affected by one thing and one thing only, and that's sentiment."

For now, he's focusing on selling Acqua Liana, on the market for $29 million. The Manalapan manse includes a number of eco-friendly features such as solar panels and wood from fast-growing trees like bamboo and coconut.

McKinney has built two dozen mansions in Palm Beach County. Over the past 10 years, McKinney said, his mansions have sold for an average of 5 percent below list price, and after 55 days on the market. But he doubted he'll sell so close to his asking price or so quickly.

"That's gonna be a tall order," he said.

As McKinney's caution suggests, the high end of the economy no longer lives in its own little fantasy world. A year ago, private jets were still selling, mega-yachts were moving, and home prices in the town of Palm Beach were soaring (even as prices in the county of Palm Beach were tanking).

Now, though, mansion sellers like Dru Schmitt have slashed prices. Schmitt sold his 23,000-square-foot palace in Boca Raton in January for $12.9 million, after originally listing it for $24.9 million. The deal was recorded at $10.9 million, but the buyer paid an extra $2 million for furniture, said the buyer's agent, Gary Pohrer of Fite Shavell.

In another example, E. Llwyd Ecclestone III accepted $11.3 million for a home in Lost Tree Village near North Palm Beach. The 13,080-square-foot house was listed at $15.9 million, said Ecclestone's listing agent, Dolly Peters of Illustrated Properties Real Estate.

Luxe retailers are hurting, too. Take Tiffany: The jeweler reported holiday sales plunged by 21 percent from a year ago, and it has offered early retirement packages to 800 employees. A few employees at Tiffany stores in Palm Beach and Palm Beach Gardens are said to be taking the offers.

And two Palm Beach boutiques - Christian Dior at 202 Worth Ave. andEmanuel Ungaro at 440 S. County Road - closed late last year.

The global meltdown has brought more setbacks for Rodger Krouse andMarc Leder, two titans of the private equity industry who run Sun Capital Partners of Boca Raton.

Both invested with Bernard L. Madoff Investment Securities, the massive Ponzi scheme, and appear on the list of victims released this month by a federal bankruptcy court.

"The investment in Madoff was a small personal investment made by our co-CEOs and represents an insignificant part of their investment portfolio," a Sun Capital spokesman said. "Sun Capital Partners and its limited partnerships did not make nor have ever made an investment with Madoff."

In January, Sun Capital laid off 23 workers, or 10 percent of its staff. And this month, another of Sun Capital's 90 or so portfolio companies sought bankruptcy protection. Fluid Routing Solutions, a Michigan-based supplier of auto parts, filed Chapter 11.

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Real Estate Agents buying house for way under property assessed value:

Real estate brokers buy 4BD in Palm Beach
by Christian Lambert, publishedTuesday, January 13 2009 12:42 PM
Christian J. Angle and Ann-Britt Angle bought a four-bedroom, 3.5-bath home at 280 Orange Grove Road in Palm Beach from Robert X. DeMarcellus and Mildred F. DeMarcellus for $1.067 million on Dec. 24.


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