This Ain't Melrose Place

Posted by: Chris Palmeri on July 22, 2008

the century.jpg

The Los Angeles Times reported today that Candy Spelling, widow of TV producer Aaron Spelling, paid $47 million for a condo at the Century, a new building being built by New York City-based Related Cos. The price is a record for a condo in the city. It works out to be $2,800 a square foot.

Ms. Spelling is taking offers for the famous 123 room mansion in LA’s Holmby Hills neighborhood that she and her husband built in the late 1980s. It has 11 bedrooms, 16 bathrooms, a bowling alley, gift-wrapping room and a doll museum. She’ll soon be living in just a third of the former space at 16,500 square feet. Sooner or later we all have to downsize.

Reader Comments

scambuster

July 23, 2008 6:26 AM

This is another real estate scam placed in the media by Madison Avenue PR con-artist. Because Florida and California high-rise condo prices have crashed in the same down-ward spiral as single family dwelling, the condo scamers are trying to find ways to shore up the prices before the final crash-and-burn. Taking a page from marketing text book, the scamer used a modified old gig. An old similar con-job went like this: To push diamonds on the unwary, diamond producers will unveil a large diamond from their vault and contract a famous movie celebrity to wear it at a big festivity such as Academy Oscar or Emmy night. As the diamond jewels reflect the camera flash in a shower of lights, the Tabloids and mass media are updated as to the value and rarity of the gem by the gem producers. To the "Ooos and Ahaas," the diamond producers will subtley whisper that similar gems are available at your local Tiffany's. Real estate scam follows a similar pattern: Announce a popular celebrity buying expensive real estate in a neighborhood with the hope that others will pay similar high price for the other similar property. Later, the real estate developer quietly repurchase the expensive condo/property from the celebrity for the same price plus a "handling fee." In the diamond scenario, the movie star quietly has to return the borrowed jewelry to the real owner but she is paid a handsome modeling fee. In both situations, the scamer's real objective is to raise the market price of the product by manipulating the public's perception. In Las Vegas, the evil Californian real estate flippers have built hundreds of condo that are now begging for buyers. However, luckily for Mr. Trump, the construction of a high rise condo with his name was placed on hibernation status due to the collapse of real estate in Las Vegas. Perhaps, Mr. Trump "fired" all those evil California landscamers? In any event, the evil California's high-rise condo flippers will suffer the same fate as those in Florida: bankruptcy.


(NOTE FROM BUSINESSWEEK ECONOMICS EDITOR PETER COY: IT'S IMPORTANT TO NOTE THAT THERE IS NO EVIDENCE THAT THIS WAS A FRAUDULENT TRANSACTION.)

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About

BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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