Subject: FT: US government is selling off lavish ambassadorial residences
 around the world
From: Faubillaud 
Newsgroups: misc.invest.real-estate alt.lawyers
Thread-Topic: FT: US government is selling off lavish ambassadorial
 residences around the world
Thread-Index: AcgYW7GN8EE8cYROEdywUQAZ4zb/2Q==
	charset="UTF-8"
Date: Sat, 27 Oct 2007 05:36:12 GMT
Bytes: 10936

Diplomatic baggage
 
By Troy McMullen
 
Financial Times
Published: October 26 2007 18:52 | Last updated: October 26 2007 18:52
 
The three-storey house for sale on Acacia Avenue in Ottawa, Canada has
plenty to recommend it. Set on an acre of land in the leafy, upmarket
Rockcliffe Park district, it includes five bedrooms, lush English gardens
and a sunroom large enough to entertain dozens of guests. It even has a
Hollywood connection, having featured in the 1990 Paul Newman and Joanne
Woodward film Mr and Mrs Bridges.
 
But the thing that most distinguishes this house from its neighbours is its
owner – the US government. The 64-year-old property, priced at C$2.85m
($2.93m), has served as a ministerial residence for generations of deputy
ambassadors. And it is just one of more than a dozen diplomatic residences
that the US State Department has recently put up for sale in capital cities
from Bangkok to Bogotá as part of an unprecedented real estate disposal
programme.
 
These range from a former ambassador's residence in Taipei, Taiwan, with
views of the Yang Ming Mountains, valued at T$65.2m ($2m), to a 1,582 sq ft
condominium in Santiago, Chile, listed at 75.7m pesos ($150,000). In
Jakarta, Indonesia, Rp5bn ($550,000) will buy a 107-year-old single-family
home dating back to the Dutch colonial era, and in Warsaw, Poland, where the
property market is booming thanks to a shortage of high quality housing, 1m
zloty ($400,000) each is the asking price for a pair of four-bedroom
townhouses in the trendy Mokotow district. For more adventurous buyers,
there is also the former ambassadorial villa in Tripoli, Libya, priced at
LD1.9m ($1.5m).
 
"It's really the first time something on this scale has ever occurred," says
Dwight Mason, a career US diplomat who served as deputy chief of mission and
minister in Ottawa and lived in the Acacia Avenue house with his wife and
two children from 1986 and 1990. "It will be interesting to see just what
everyday house hunters think of these places."
 
The sales are happening because the US government is moving many of its
overseas workers into more modern or secure buildings to meet stringent
safety requirements enacted after the 1998 bombings of its embassies in
Kenya and Tanzania, the September 11 terrorist attacks and the invasions of
Afghanistan and Iraq, which have stoked anti-US sentiment around the world.
 
There have been more than 250 attacks or attempted attacks on US embassies
or diplomatic residences since 1975, the State department estimates.
Incidents include an incursion by armed Liberian marauders on the grounds of
the US embassy residence in Monrovia in 1996 and a late-night rocket attack
on the embassy security staff residence in Santiago, Chile, in 1991.
 
Some 29 sites in 21 countries have been deemed "excess property" and listed
with private real estate agents selected by the Bureau of Overseas Buildings
Operations, which manages the facilities. About half of are non-residential,
including historic embassies and ancillary buildings such as London's
immense former Navy Annex in Grosvenor Square, which is on the market for
£90m. Chancery buildings in Panama, Nicaragua and Nepal are also being sold.
 
But it is the diplomatic residences that offer property buffs a rare glimpse
at the lifestyles of US emissaries. In Caracas, Venezuela, for example, one
sprawling residence, priced at 4.5bn bolivars ($2.1m), sits on more than 2.2
acres and includes a master suite, four bedrooms with private baths, a house
manager's quarters and large terraces overlooking a pool. In Abidjan, Côte
d'Ivoire (previously the Ivory Coast), the former ambassador's estate has
two swimming pools and two tennis courts, while the compound in Mali
includes a cultural centre and a snack bar.
 
"These homes are often the most lavish properties in their towns," says real
estate agent Jonathan Lohr, who is marketing the former ambassador's
residence in Belize City, following a move by the US embassy and its
diplomats to the new capital of Belmopan. The 6,000 sq ft, five-bedroom
property is priced at Bz$1.3m ($650,000) and sits in North King's Park, one
of the most expensive areas in the city. Lohr says he shows the property to
prospective buyers about once a week and has had several "serious offers"
from European, US and Middle Eastern buyers.
 
Russell Freeman, a former US ambassador to Belize who lived in the house
with his wife, Susan, from 2001 to 2005, describes it as "pretty amazing by
our standards". The master bedroom, with its walk-in closet, private
verandah and hot tub, was "wonderful to have at our disposal." But his
favourite feature was the well-groomed gardens and grounds, which were ideal
for receiving local dignitaries and visiting diplomats. "During functions,
we'd sometimes just open up the doors at the back of the property and let
people just enjoy the place," he says. "It was interesting to watch folks
just wander around after having a few drinks."
 
Friends and family from Freeman's native North Dakota also loved the house –
and its tropical location. "Needless to say, my wife and I were very popular
once winter rolled around on the prairie," he says. To make it feel more
like home, they brought their cat and a painting of a plowed field and
farmstead.
 
Although the structure was built in thick, white concrete blocks and has
both security fencing and guard tower, Freeman says it never felt imposing.
The only real problem was termites; exterminators had to be called "a number
of times". "We didn't really mind it so much but it's the kind of thing that
can scare off prospective buyers," he says.
 
The US is not the only country looking to downsize its diplomatic property
portfolio. The Canadian government recently put two properties on the market
in Europe: the Canadian ambassador's residence in Dublin, an eight-bedroom
pile surrounded by nearly nine acres of parkland in Killiney overlooking
Dublin Bay, listed at €17m, and an eight-storey mansion in London's
Grosvenor Square, directly opposite the US embassy, that could be converted
into a hotel or luxury apartments. The asking price for the latter is £300m
and, according to estate agents handling the sale, more than 20 property
developers and British and overseas financiers have expressed interest.
 
The UK is meanwhile reviewing the possible sale of hundreds of homes for
diplomats and other staff in an effort to cut costs. (The residences of the
High Commissioner to South Africa in Pretoria and Cape Town are said to be
on the list.) And last year France put dozens of historic properties in
Paris and the provinces on the market, including an historic townhouse
facing the Bois de Boulogne that once belonged to the aristocratic Noailles
family. French billionaire Vincent Bollore paid €10m for the property and
Russian billionaires have reportedly snapped up some formerly
government-owned villas on the Cote d'Azur.
 
What separates the American sales from these others is the scope and size of
the real estate on offer. The US has one of the largest and most well-funded
diplomatic property portfolios around the world, with more than 3,500
buildings in 193 countries, including 264 embassies and consulates,
estimated to be worth $12bn in total, according to the Bureau of Overseas
Buildings Operations. It is also known to spend handsomely on diplomatic
residences and embassies, historically viewing them as lavish platforms for
wining, dining and deal-making.
 
Not all of these houses are expected to fly off the market, however. Some
have been left unoccupied for years and are now in poor condition. Agents
who have seen the former US ambassador's residence in Taipei, a focal point
for celebrity, political and cultural life during the 1960s and 1970s, for
example, say it needs updated electrical systems and a more modern kitchen,
as well as a fresh coat of paint. "I have good memories of my use of that
house and it has an interesting history," says Ray Burghardt, a former US
envoy to Taiwan who used it as a weekend retreat between 1999 and 2001. But
"my immediate successor didn't share my appreciation for the place."
 
Other properties might be overpriced. The Belize house was, for example,
originally listed at Bz$1.4m and, although that has dropped to Bz$1.3m, even
Lohr acknowledges Bz$1.2m is "probably more reasonable". In Ottawa's
Rockcliffe Park, only 11 homes valued at C$2m or more have sold in the past
two years, according to Marilyn Wilson, the broker selling the Acacia Avenue
house. And, while she still thinks she can get C$2.8m, she acknowledges "the
market will ultimately tell you if it's priced too high".
 
Mason, the diplomat who lived in the house, says he's confident buyers will
pay up for its large sun room, garden and vast but comfortable layout. "It's
the nicest place we've ever lived," he says. "It was large enough to hold
receptions for hundreds of people but it was also cosy enough for a single
family." He and his staff used to host about 1,000 people a month for
lunches and dinners in the residence, making full use of its commercial
kitchen and large dining rooms.
 
The most difficult property to unload might be the compound in Tripoli,
which measures 7,000 sq ft, with a pool, changing facilities, staff quarters
and huge gardens. Vacant since 1980 and the site of numerous anti-American
protests, it needs "internal renovation" and has "title issues", which,
according to the property prospectus, the State Department is "working
through".
 
http://www.ft.com/cms/s/0/069a2722-82a6-11dc-a5ae-0000779fd2ac.html