Oakland Tribune from Oakland, California • 38

C2 il SUNDAY SEPTEMBER 14 2008 BUSINESS BAY ARTA NEWS GROUP defaults are) obviously distressing because much of this real estate collateral does not generate the rental income that would allow us to pay operating expenses David Choo President CMR Pletschet ROM PAGE I (legally called limited part ners) and to new investors The decision to open the fund is primarily based on new lending opportunities that exceed the existing capital according to William Owens the president of the company I said in my last letter the banks are reluctant to make new loans with the uncertainty in the market Owens said in a letter to investors buying opportunities increasing for the professional real estate investor we are seeing more lending situations that meet our underwriting current yield is 68 percent it takes $2000 to enter and certain suitabil ity standards must be met Investors will be required to complete review and sign a new subscription agreement Anyone interested should call Elaine Brazil at Owens 925 280 5398 The overall picture at the Davis fund looks good ac cording to Howard Davis the general partner but the fund is still temporarily closed He says he has one foreclosure and seven The yield at Davis is currently about 318 percent but Davis hopes it will be up to 6 per cent by the end of the year San rancisco based CMR Second hand first choice for many Consignment stores prove rich pickings for budget conscious consumers By Tiffany Hsu LOS ANGELES TIMES LOS ANGELES As be fits a recording artist living in fashion conscious California Laura Cohn has an extrava gant wardrobe stuffed with world class labels and high wattage jewelry But going for a dif ferent brand of shock and awe: Her two pairs of True Religion jeans which can run more than $300 apiece cost $35 and $40 at the Lucky You Resale Boutique in North Hol lywood She put down $23 for her Coach loafers The Gucci sandals she wears to work? $25 The 45 year old Burbank resident is a longtime bargain shopper Recently married she bought her wedding dress for $20 on eBay She rarely ventures into department stores preferring to designer clothes for next to pretty funny to see jaws drop they decide if going to smile or be she said getting deals more fun and allows me to do more with my Boutiques are folding and fewer buyers and sellers are: going to a shrinking number of retail trade shows But Cohn is getting a lot of company at consignment resale and thrift stores from1 parents shopping for back to school clothes to sales reps trying to squeeze cash out of samples no one else will buy a panic right now and scared out Lucky You co owner Dina Kimmel said re sale is booming Business for everybody else is bad but for us Consignment stores sell DON BARTLETTILOS ANGELES TIMES STUDENT Kristina Marquez ponders a skirt from a rack of new and used clothes at Buffalo Exchange in ullerton goods for individual con signors who technically own the item until the sale goes through and they receive a portion of the transaction High end consignment typ ically is referred to as resale Thrift or charity businesses usually stock their stores through donations and keep all the revenue In a survey conducted by the National Association of Resale Thrift Shops com paring sales figures for April 2007 and April 2008 at 185 stores 75 percent said their sales had increased 80 per cent reported a jump in new customers and 65 percent noted a boost in suppliers Just 10 percent said their sales had decreased Department store sales fell 57 percent from July 2007 to the same month this year and the specialty apparel sector skidded 55 percent accord ing to the International Coun cil of Shopping Centers At Lucky You sellers have ramped up their spring clean ing some coming in weekly when they once swung by twice a year Even wealthier customers who once donated now con sign spreading the extra cash to baby sitters or housekeep ers Kimmel said After a while most consign ment stores offer to donate a money 1 Some consignors are find ing that the common 30 per cent to 50 percent cut they get at a store enough So they head to consignment conven tions where they sometimes see up to 70 percent of the proceeds Each of the 65 Just Be stretch their dollars because items to charity But these days more sell ers are opting to take back the goods and try their luck else where store owners said The consignor list at Lucky You gets crowded faster than it used to Kimmel and fellow owner Gina Canepa rtbw accept only brqjjd name riends franchises tweei nationwide nut on about two events a ybar where partici pants can btK and sell baby clothing and gear lu sa Ok a the site ot the original event 1250 con signors gathered jfor the fall show founders Driven Tackett and Shannon wfibum said: ili at atp 1 i eryones calling and wafttffigngretty well are having to to sell stuff and we ve had to push them Canepa said imagine what it must be like for Kimmel said lucky to be buying but we also feel terrible because people are selling something so beauti ful just because they need the what bringing in doing what it used to Tackett said is just a smart The sale side of consign ment also is swelling with new customers each week owners said Pinched shoppers increas that were living pretty well are having to stretch their dollars because what bringing in doing what it used to do This is justr a smart Daven Tackett Go founder Just Between riends ingly swap their old goods for other fashions at Lucky You I where a $395 Tylie Malibui bag goes for $120 and original owner gets $50 1 have the same stuff as department stores but going to know if worn once or Canepa said easier for some custom ers to think of it as a foray into vintage Sec ondhand fashions catapulted into vogue several years ago and now the thing to Kimmel said buy the stuff fast At or Nordstrom' Elisabeth Roberts 70 of Bur bank has to debate whether to spend money but she rarely hesitates at Encore Sifting through $2 items outside the Burbank consign ment store the retiree and occasional consignor said the sour economy had forced her to combine shopping trips to save gas The trick to buying resale is shopping patiently and care fully keeping an eye out for rips or stains Roberts said She picked up a Chico long sleeved shirt that was priced at $14 you find good things and sometimes you but if it looks really good and I like it it matter where I buy she said has been hit with a high level of loan defaults with much of its properties in foreclosure andor bankruptcy according to a newsletter from David Choo company president is obviously distress ing because much of this real estate collateral does not generate the rental income that would allow us to pay operating expenses and dis tribute net operating income to our Choo wrote Information on CMR can be obtained by calling 415 974 1100 In short it seems to me that CMR has become more of a real estate fund and less of a mortgage fund an unintended consequence to be sure So real estate investors should look to real estate investment trusts which I have been touting for years Their yields are high and strong because they must payout 90 percent of their taxable income to sharehold ers I stress equity REITs not mortgage REITs which are too similar to annie Mae and reddie Mac Equity REITs own property that produce rental income and mortgage REITs as the name suggests lend money in the mortgage market One mortgage REIT Annaly Capital Management seems to come off as a survi vor Inexplicably its price has spiked But still suspi cious Its dividend yield of 13 percent seems fearfully fat Anyway let me leave you with this thought Be wary of any product with bond mortgage credit or similar terms in the title or in its descriptions particularly when an inordinately high yield is promised The lesson I learned from mortgage funds (yes still learning) is that any investment luring your money should be liquid and transparent Liquidity means you can get your money out with a phone call or mouse click Transparent means that its changing value can be followed in newspaper tables My mortgage funds are nei ther liquid nor transparent Cliff Personal i nance column appears riday and Sunday Send general interest questions to him at PO Box 28147 Oakland CA 94604 To subscribe to his quarterly newsletter Invest ment Educator send $20 made out to Personal Invest ment Education to the above address Also visit our Web site www investment educa tor com LAURA A ODASTA PHOTOS EVEN THE BATHROOM of a finished 1 0th floor Cathedral Building condo has great views IBBI A rp I Ju si I S' I Condos ROM PAGE 1 Street) BART station urban I spent 40 years of my life in New York City So to me it was comfortable You walk down the street and a little gritty I understand it The buildings are beautiful and energy and the weather is great and a good location Everything re minded me of said Brog who first thought about building luxury condos in San rancisco but changed his mind when he saw Oakland The building is a familiar landmark in the city Over the years the triangular shaped structure has been referred to as the latiron Building a name that derives from the el egant skyscraper resembling the shape of a flat iron 1 he Cathe dral Building is one of two flatiron de sign buildings in Oakland The other one is the irst National Bank Build ing a short distance away at: Broadway and San Pablo Av enue Several flatiron design skyscrapers were built in American cities in the early part of the 20th century The building has also been called the Wedding Cake Building in addition to the Ca thedral Building Its original name the ederal Realty Co Building just take off While Oakland may share some similarities with Brook lyn the Cathedral Building condos are meant to evoke the kind of luxurious flats found on Park Avenue And unlike new from the ground up condo projects Brog restored an existing skyscraper that is on the National Register of Historic Places Located on a wedge shaped parcel of land between Broadway and Telegraph Avenue the spacious units have two or three bedrooms and range from 1476 square feet to 2016 square feet All have private entrances and feature luxury finishes that include hardwood maple floors white walls and huge windows that offer stunning views They are priced from the high $800000s to $13 million1 far higher than the median sales price for new condos in Oakland In July 2008 the median sales price for new homes which in Oakland is mostly condos was $350000 or 257 percent lower than a year ago accord ing to DataQuick Information Services Brog is not discouraged that he is selling condos at a time when the market is a slump not entry level stuff getting people coming in from Montclair and he said in describ ing where some potential buyers live now who have expressed interest Two of the condos are un der sales contract since Calde cott Properties of Oakland began marketing the property in early August Three years ago Brog purchased the 14 story Cathedral Building the first Gothic Revival skyscraper to be built west of the Missis sippi for $3 million He spent about $7 million to transform the former office building into condos on the top seven floors and six commercial condos on the lower floors Designed by architect Benjamin Geer McDougall the steel frame structure was completed in 1914 The build ing was eventually renamed the Cathedral Building in 1969 due to its arched windows i mansard roof and pointed spires Ten years later it was placed on the National Register of Historic Places under the name of the ederal Realty Co Building building is a one of a said Brog during a tour of the property thing is new except for the bones of the building The Online: or a little of the history and to see more photos of the Cathedral building go to Inside BayArea combusiness insicteBayArea 't ANDY READ of Caldecott properties shows off an expansive 7th floor condo exterior the whole structure The Cathedral Building was among several architec turally significant buildings built in Oakland after the 1906 San rancisco earth quake and before the Great Depression Many are no longer around is a wonderful building and glad that it has sur said Dennis Evanosky an Oakland resident and his torian and co author of Bay Then and Over the years he has visited the build ing before it was turned into the mixed used development it is today was kind of cool You would expect Philip Marlowe to come out of one of the doors or here comes Sam Spade down the said Evanosky referring to the hard boiled detective fictional characters created by Ray mond Chandler and Dashiell Hammett was all very charming But it top of 1 the he said Now it is While Marlowe and Spade would certainly recognize the exte rior the two gumshoes would 1 not recognize the interior space of the luxury condos that have replaced the former 1 offices The property is indeed I unlike the moderately priced 1 condo projects built in down town Oakland in recent years observed Matt Anderson a partner at oresight Analytics an Oakland based real estate analysis and forecasting firm other projects are large In the first place got hundreds of units and they are generally new construction as opposed to a renovated building (The Cathedral Building) is at a different price point also i a more unique project All they need is seven commit ted buyers to make it Anderson said Eve Mitchell covers personal finance and real estate Reach her at 925 952 2690 or emitch ellbayareanewsgroupcom 8 i.