Financial
Times
Diplomatic baggage
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”.
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