Unprecedented Real Estate Disposal as U.S. Sells Unsafe Diplomatic Residences

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 sun room 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 Bridge .

But the thing that most distinguishes this house is its owner — the US government. The 64-year-old property, priced at C$2,85m ($2,93m), has been a residence for generations of deputy ambassadors. And it is just one of more than a dozen diplomatic residences the US state department has recently put up for sale in capital cities from Bangkok to Bogotá in an unprecedented real estate disposal.

These range from a former ambassador's residence in Taipei, Taiwan, with views of the Yang Ming Mountains, valued at 65,2-million new Taiwanese dollars ($2m), to a 147m² condominium in Santiago, Chile, listed at 75,7-million pesos ($150000). In Jakarta, Indonesia, 5-billion rupiah ($550000) 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, 1-million zloty ($400000) 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 1,9-million dinars ($1,5m).

"It's really the first time something on this scale has ever occurred," says Dwight Mason, a 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 to 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 in 1991.

Some 29 sites in 21 countries have been deemed "excess property" and listed with private real estate agents. About half 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 4,5-billion bolivars ($2,1m), sits on more than 8900m² 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 , 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 557m² , five-bedroom property is priced at 1,3-million Belize dollars ($650000) 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 veranda 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 ploughed field and farmstead.

Although the structure was built in thick, white concrete blocks and has both security fencing and a 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."

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 4ha of parkland in Killiney overlooking Dublin Bay, listed at € 17m, and an eight-storey mansion in London's Grosvenor Square, opposite the US embassy, that could be converted into a hotel or luxurious flats. 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 shown interest.

The UK is also 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 SA 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 a 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 3500 buildings in 193 countries, including 264 embassies and consulates, estimated to be worth $12bn in total. 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 these houses are expected to fly off the market, however. Some have been unoccupied for years and are 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 new electrical systems and a modern kitchen, as well as a 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".

The most difficult property to unload might be the compound in Tripoli, which measures 650m² , 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".

Troy McMullen writes for the Financial Times

Article by: Troy McMullen - http://allafrica.com