Luxury Real Estate News 06/08

Like many luxury developments recently, the W San Diego returns to lender

Not really a great deal of good news in the markets this week. Unless you call one of the prime movers (sic) in the sub-prime mortgage debacle getting what was coming to him good news that is. The stock market does seem immune to any bad news these days though, so who knows?

Former Countrywide CEO Mozilo charged with fraud

The Securities and Exchange Commission formally charged Angelo Mozilo, the former CEO of Countrywide Financial Corp., with fraud and illegal trading this past week. Countrywide was one of the major players in the 2007 subprime mortgage meltdown that kicked off the current global financial crisis. Countrywide COO David Sambol was also charged with civil fraud, as was Countrywide former chief financial officer Eric Sieracki. International property investment

Parents pulling the plugs on Williamsburg Trust-Funders

For the past five years, Ernie DiGiacomo has been able to count on parents to guarantee the $1,500 to $2,500 rents he charges for the 15 apartments he owns in Williamsburg, Brooklyn. When he called renters who had missed payments, he often heard, “My parents will send you a check.” But in the past six months, the parents are pulling back financial help, he said, and as a result, he has watched more renters move out. New York Times

Luxury condos face money woes

When the first condo owners moved into The Summit at Copper Square, Phoenix leaders hailed the luxury high-rise because it would bring residents who live, work and shop in the heart of the city. But two years later, the 22-story complex near Chase Field has millions of dollars in unpaid bills, from late utility payments to construction costs. AZ Central

Four seasons lawsuit underscores luxury hotels’ troubles

When the owner of a five-star resort hotel in Southern California decided to dump its property manager earlier this year, it was just the beginning of a very public and ugly divorce. The dumpee is none other than the Four Seasons, a brand synonymous with luxury. And it is battling to stay on managing the Four Seasons Resort Aviara near San Diego. Philly.com

Sunstone REIT forfeits W Hotel

Sunstone Hotel Investors Inc. intends to forfeit the 258-room W San Diego to its lenders after its efforts to reach a compromise on the luxury hotel’s $65 million securitized mortgage failed. Sunstone, a real-estate investment trust that owns 43 hotels, bought the W for $96 million in 2006 from a group led by developer Gatehouse Capital Corp. Since then, the slumping performance of the W San Diego and the broader hotel market has made supporting that mortgage a challenge for Sunstone. Wall Street Journal