Sotheby's Auction House in Financial Difficulty

If you thought the real estate bubble was bad, spare a thought for the even-more deflated art bubble. World famous auction house, Sotheby’s, and by extension, Sotheby’s International Realty, would seem to be in some financial difficulties at the moment. The current situation has more to do with declining art “values,” and unrealistic guaranteed prices, than anything else. Sotheby’s share price has fallen dramatically over the last three months, and is currently trading at around $8, down from a high of over $56.

The firm has just borrowed another $250 million, pushing the edges of their $300 million credit facility, bringing their total debt up to around $620 million, and has just filed an 8-K with the SEC stating they have lost another $15 million after recent sales in London and Hong Kong failed to reach guaranteed levels. Adding to the problem, their accounts receivable now top $1.6 billion, and they stand a very good chance of being unable to collect at least a portion of this. Much of this debt is owed by Russian “billionaires,” no longer in a position to pay.

Auctions being held today and tomorrow in London and New York, expose the firm to another spate of potential losses if prices remain depressed and do not reach guaranteed levels. One painting by Picasso, “Arlequin,” which was expected to sell for $30 million when the auction was arranged, has already been withdrawn. A Sotheby’s representative stated that the painting had been withdrawn for “private reasons.”

This is unlikely to have any impact on realty associates, other than perhaps waking up to discover a new owner sometime soon. It is difficult to judge at exactly what point Sotheby’s becomes a potential take over target, because the one difficult-to-value asset they own is their brand name, but if the share price drops much lower, I would hazard a guess they will become an attractive trophy purchase.

Sotheby’s 8-K Filing

Fuller Towne and Country Magazine

Fuller Towne & Country, one of the major luxury real estate firms in the Denver area, has been sold. The company’s founding partners will remain at the firm as broker associates.

Linda Behr, one of the founding partners said in a press release recently, “Selling Fuller Towne & Country was never high on our list of priorities. But when the opportunity presented itself, to affiliate with such a strong international brand such as Sotheby’s … we thought it was the very best thing we could do for our clients, our brokers and ourselves.”

Fuller Town & Country made nearly $1.1 billion in sales volume last year, with 150 broker associates operating from its four offices.

Heather Parness, president of Fuller, will remain as president of the new company. All other managing brokers, broker associates and administrative staff will be retained.

“The addition of the Sotheby’s name will significantly enhance our customer service through expanded advertising and marketing programs, expanded Internet exposure, and extensive national and international recognition of the Sotheby’s brand,” Parness said.

Scott Webber purchased the company, which will henceforth bear the name, Fuller Sotheby’s International Realty. A purchase price was not disclosed.

Webber owns the rights to the Sotheby’s high-end residential sales and marketing brand in the foothills and along the Front Range.

He will add two current Sotheby’s offices — in Evergreen and Boulder — to the four Fuller Towne & Country offices in Denver and along the Front Range the company said in a statement late Tuesday.

Mr. Webber is a long time veteran of the Denver real estate market, owning Coldwell Banker Van Schaack and Co. from 1989 until its purchase by NRT in 1998. He left Coldwell Banker Residential Brokerage in 2001.

Fuller Towne and Country

The Brain Trust

The answer is that they will both be sharing the secrets of their networking successes at the 13th Annual Luxury Real Estate Fall Conference which will be hosted at The RItz-Carlton in Philadelphia during October 11-14th

Unique Homes reports that “The Brain Trust,” the most prominent all-women organization in the luxury real estate industry will be sharing their secrets at the conference.

Through our discussion at the Fall Conference, we hope to demonstrate that even though we are competitors, as real-estate agents, we are missing the boat by not tapping into each other’s experience and knowledge base. It is incredibly important to have ongoing mentors, no matter how long you might have been in the business.” Anita Head

The Brain Trust consists of seven luxury real estate industry leaders who own their own companies:

• Shari Chase, president/CEO of Chase International Distinctive Properties in Lake Tahoe, Nev.
• Anita Head, partner/president of Paragon Real Estate Group in San Francisco.
• Patricia Petersen, president/CEO of Daniel Gale Sotheby’s International Realty in Huntington, Long Island, N.Y.
• Jenny Pruitt, CEO/founder of Atlanta Fine Homes Sotheby’s International Realty.
• Michael Saunders, CEO/founder of Michael Saunders & Company in Sarasota, Fla.
• Lois Schneider, president/founder of Lois Schneider Realtor in Summit, N.J.
• Martha Turner, president/founder of Martha Turner Properties in Houston, Texas.

By pooling their knowledge, experience and honest feedback, firms can stay on the cutting edge and remain financially savvy when sharing best practices. We will share how the Brain Trust operates and will be happy to cover how we, individually, are handling social networking, the international market and our tips for surviving in a challenging market. Anita Head

The Brain Trust was formed in 1997 by Petersen, Pruitt and Schneider to share secrets to their success and growth, while enjoying some well-deserved spa time, says Unique Homes.

“These women came together to share best practices, strategize and advise each other on problematic issues and interesting opportunities, and absolutely improve and grow their real estate companies in a way that was right for their individual markets,” Head says. “Essentially, it was formed so that they could help each other in a safe and trusting environment with no judgments, other than some pretty strong opinions. The only rules were that you had to be a woman, agree to confidentiality, and to have ownership in the company. The bonus is the deep friendships that have developed along the way.” More details plus photo and story credit - Unique Homes Blog

Jim Walberg, Presidential Candidate

Also sharing his secrets will be Jim Walberg, co-owner/broker of The Bay Area Team, the most-successful team at Keller Williams Realty in Danville, Calif. Mr. Walberg began blogging as an experiment, his first site being Caribbean Islands Realty.

I have spent over 35 years in the Caribbean as a sailor and as a Realtor so I know this region of the world very well. I never expected there would be any lead-generation results from my experiment. I was just experimenting. And after two years of blogging, it has been confirmed without a shadow of a doubt that my vision of creating an Internet system, which allows people from all over the world to participate in real estate, is possible. Jim Walberg

Jim would appear to be a man after my own heart, and after much consideration of the two current Presidential candidates has decided to run for the office of President of the United States himself as a fifth alternative. Go Jim !

Now it is not often you get the opportunity to get up close and personal with a candidate for President, so take it while you can. And if you should be successful in your bid Jim, please don’t forget your supporters. For myself, I would think something like “Ambassador to Barbados,” or similar would be in order………

Count Carlo Felice Trossi’s wristwatch sold for a record 2.345 million Swiss francs ( $2,157,760) at a Sotheby’s auction. Experts described “Trossi Leggenda” almost certainly unique amongst 200 watches. This is because it is a watch of historic importance as well as symbolizes the year 1932, a marking point which also saw car racing and the emergence of airplanes.

Geoffery Ader, head of watches at Sotheby’s told a news conference held before the sale that the watch was one of “great symbolic and historic importance as it came out in 1932, a turning point which also saw car racing and the emergence of airplanes.” He added that the “combination of Patek Phillipe and Ferrari make it an exceptional watch”.

A number of other watches also reached impressive prices. A gold Rolex made around 1980, known as the “Oyster Daytona Paul Newman” and named after the Florida car race and for the American actor who made the style famous, netted 157,000 francs, compared to its pre-sale estimate of 50,000 to 80,000 francs.