For the first time in history, each of the 10 most expensive homes for sale in the U.S. are listed for at least $100 million.
By Camilla McLaughlin
“One day there will be a billion dollar house,” quipped Barbara Walters during a 1989 broadcast featuring a $10 million property in Beverly Hills listed by Joyce Rey, executive director of Coldwell Banker Previews International. At the time, $10 million was a rarity.
A billion dollars might sound preposterous, and residential real estate in the U.S. is nowhere near that mark, but the post-recession spike in luxury transactions, record-high prices for ultra-properties and per-square-foot costs pushing as much as $5,000 or more make $1 billion seem just a little less outlandish. In fact, one U.S. property is approaching that heady figure — a Texas ranch covering 800 square miles, owned by the same family since 1849 and priced at $725 million.
This year, the top price for a residential property hovers just under $200 million, and Ultimate’s top 10 most expensive begin at $100 million, amounts that cause even seasoned experts to pause. “Pretty astonishing,” is the reaction of Craig Morris, co-owner of Aspen Snowmass Sotheby’s International Realty. “We’re in the stratosphere now,” says Paul Boomsma, president of Luxury Portfolio International and COO of LeadingRE. “In this expanding market, we are seeing numbers no one has approached before,” says Jeff Hyland, president of Hilton and Hyland in Beverly Hills.
Contrast these prices with the first Ultimate Homes published in 2005. Seventy-five million was the peak and the top 10 began at $48 million. Ultimate Homes was the first publication to identify and chart the most expensive properties for sale in the U.S. Over the years, we’ve enhanced the process, but still meticulously search properties all over the country. Today, you might see similar lists, but most skim the surface, cherry picking the most publicized properties. Few dip below the top 10 or 15. Ultimate Homes continues to define $20 million as the jumping off point for the ultra-high end.
Crowning the list is Palazzo di Amore, a lavish estate on 25 acres that out dazzles even Beverly Hills. The centerpiece is an exquisite Mediterranean villa fashioned by architect Bob Ray Offenhauser and designer Alberto Pinto, complemented by a 15,000-square-foot entertainment complex, guesthouse and a landscape of gardens, olive trees, fountains and a vineyard that produces the estate’s own private label. Joyce Rey and Stacy Gottula with Coldwell Banker Previews International in Beverly Hills, who closed the top U.S. sale in 2010, are listing Palazzo di Amore for $195 million. When Rey establishes a price, the industry takes notice thanks to a well deserved reputation that spans decades as someone who makes and breaks records. In 1978, she doubled the highest price for a residential sale. At the time, $4.2 million seemed like an impossible amount.
Dollar figures today, especially when compared to the first Ultimate, might be shockingly high, but they are not totally unexpected. It only takes a look at prime markets in the U.S. or global cities such as London to understand how the ultra-market has reached dizzying price points.
“There is more wealth today at the top of the market than there was pre-recession, so it’s not surprising that the threshold is going up,” observes Boomsma. Not only has the amount of wealth increased, but the number of wealthy individuals is also on the rise. A recent study by Wealth X and Sotheby’s International, “Global Luxury Residential Report 2015,” showed the world’s ultra-high-net worth (UHNW) population (those with a net worth of US $30 million or more) grew by 6 percent and its total wealth increased by 7 percent between 2013 and 2014. The most popular country for foreign UHNW individuals looking to buy secondary residences? The United States.
Worldwide, New York is the city with the highest number of UHNW-owned residences, so it’s not surprising that per-square-foot list prices for the pinnacles of Manhattan real estate are also at unprecedented levels, even surpassing $10,000 per square foot in one instance. Notable buildings that once made their own statement about New York are being converted into residential towers, setting new standards for urban luxury. Built as the tallest building in the world, the Woolworth Building remains a striking icon. Under the baton of French designer Thierry Despont, the top 30 floors have been reimagined into 34 condominium residences. Original architectural details have been elevated with refined cabinetry and finishes and 15-foot ceilings. Capping the building is a seven-story penthouse priced at $110 million. Also in Manhattan, a $150 million triplex penthouse has been added to the refocused former Sony Building. Views take center stage in Manhattan, and the octagonal shape of CitySpire makes the three-story $100 million penthouse an ultimate for capturing 360-degree panoramas.
There is no indication the uber-building spree in Manhattan will slack off. Several properties with the potential for $100 million-plus prices are in the pipeline, but they are at too early a phase in construction to be considered this year. They include a $130 million penthouse at 520 Park and a penthouse at 220 Central Park South, rumored to have a $175 million list price.
While prices are sometimes viewed as simply wishful thinking by owners or a play for bragging rights to “the biggest and the best,” there is a value equation behind these figures and it usually derives from the basics: land, rarity of the property, architecture and provenance. “When a new spec house on a half an acre sells for $70 million, you know something is going on,” says Hyland, who is representing The Beverly House, listed at $145 million. “So I would have to argue that the land Beverly House sits on, which is a prime location, is worth $80 or $90 million in itself. And if you add in the 50,000 square feet of interior space, there is your valuation. You cannot duplicate the location of The Beverly House.”
The 10 acres that comprise Owlwood, priced at $150 million, resulted from the acquisition of several storied properties. Owlwood offers exceptional privacy; even the street is private. It is reportedly the largest estate in Holmby Hills. The centerpiece, with a villa designed by Robert Farquhar, is actually the very same estate that Rey set a record with in 1978.
Entirely new, built-from-the-ground-up estates in prime locations are as rare as historic classics. Even though it is newly built, Le Palais Royal would be almost impossible to replicate for the list price of $139 million. Construction began seven years ago and William P. D. Pierce with Coldwell Banker Previews in Miami, who is listing the property, says construction costs today easily would be in the $140 million range. The land alone, a prime swath with 465 feet on the Atlantic and frontage on the Intracoastal with a dock (large enough for a 185-foot vessel) in Hillsboro Beach, would be valued at $50 million today. Pierce calls it “the first American palace,” and ticks off features that make it worthy of that title. “This home is something that has never been done in the U.S. And when you combine Old World charm with a steroid called modern technology, you have something really special.”
Consider Walnut Place, the Dallas estate formerly identified as Crespi Hicks (a reference to Pio Crespi, who created the estate in 1938), and the current owner, Tom Hicks, who spearheaded a 33-month renovation. Although the property includes a four-story main house designed by architect Maurice Fatio, a two-story guesthouse, recreation complex, caretaker’s house, and even a helipad, much of the value derives from its 25 acres of meadow and forest located in Dallas’ premier address, Preston Hollow, only eight miles from the city center. Like all of the top 10, it is a rare offering that comes around perhaps only once in a generation. Allie Beth Allman, founder and CEO of Allie Beth Allman and Associates, who now has the listing and placed the property on public real estate sites in March, does not expect an assemblage of land this prestigious to ever become available again. Still, to develop the $100 million list price, she placed a conservative $2 million per acre value on the land.
When the rarity of a property is enhanced by the addition of equally unattainable acres, values increase exponentially. A good example is The Elk Mountain Lodge Properties in Aspen, comprised of four contiguous parcels, each with a residence. The main house is spectacular, but what sets this retreat apart is that the compound sits on 82.6 acres at the end of a canyon road bordered by national forest. “I don’t know where it could be duplicated in any resort market,” says Morris, who is listing the property for $100 million. Expect to see more families make acquisitions to create compounds, but Morris says such properties will still be rare. “It’s very expensive and difficult to do, and there are not enough opportunities to create that type of a property,” he observes.
Beverly House includes three separate legal parcels, six houses, three pools and two tennis courts, making it a singular compound only three blocks from The Beverly Hills Hotel. The 11 acres that comprise Briar Patch ($140 million) in East Hampton, Long Island, can be divided into two parcels. Rancho San Carlos’ 237 acres in Montecito are composed of 30 legal parcels and include acres of orchards. Another important asset, one not often seen among the Ultimate properties, but becoming ever more valuable, is uninterrupted access to water via seven agricultural meters and three storage reservoirs.
On the market but not actually listed continues to be a preference in the ultra-high end, but this year a majority of the top 10 are on public real estate sites and the MLS. Referring to The Elk Mountain Lodge Properties, Morris says, “In this case, the seller wants to sell the property and the best way to sell a property is exposure and that begins with the MLS.”
An unusually large number of historic estates populate this year’s list. Like Walnut Place, many have only had a couple of owners. Rancho San Carlos has been in the same family for over 100 years. “It is without question one of the most historic period homes still in private hands,” says Harry Kolb, who along with Suzanne Perkins, also with Sotheby’s International Realty, is listing the property for $125 million.
Especially notable this year is the litany of architects, past and present, affiliated with the properties. Reginald Johnson, a preeminent architect in the 1920s who designed Rancho San Carlos, continues to be celebrated for the many notable homes in Pasadena and Montecito. “It is a spectacular piece of architecture. We think it may be the largest home he ever did,” shares Kolb. “There is an Old World feeling of nothing being excessive. It was done with such good taste and with complete abandonment of any budget.” Plus, floor-to-ceiling windows promise almost constant sunshine. To illustrate the level of finishes, he explains the owner bought a manor house in England and had the oak paneled formal rooms meticulously dismantled and reassembled in Santa Barbara.
Two on our list share the same architect: Peter Marino, who masterfully helmed renovations in Walnut Place and Briar Patch. Owned by just three families in its 80-year history, Briar Patch is on the National Register of Historic Places, a first for the Ultimate top 10. Another first: the IMAX theater at Le Palais Royal, which is also the very first residential IMAX.
Currently, 79 percent of the world’s UHNW individuals own two or more properties and just over half own three or more. The UHNW worldwide look to the U.S. as a safe haven, which means demand for ultra-properties will continue to be strong. All of which makes one wonder if maybe at some point there actually might be a $1 billion dollar Ultimate Home.
Ziff Estate Reportedly Seeking Close to $200 Million
A 16-acre estate in Manalapan, Florida, is being offered privately for nearly $200 million by the family of William B. Ziff Jr., according to an April report in the Wall Street Journal.
Gemini, an oceanfront compound spanning the width of a barrier island, has about 1,200 feet of frontage on the Atlantic Ocean and about 1,300 feet on the Intracoastal Waterway. The listing was announced just as the editors of Unique Homes were finalizing the Ultimate Homes list of the most expensive properties for sale in the U.S. No one was available to confirm the exact price, or to comment on the record about the listing; therefore, it was left off the list, but almost certainly would garner a top spot.
Reportedly, the estate is represented by Premier Estate Properties, an affiliate of Christie’s International Real Estate.
Built in the 1940s, Gemini was the Palm Beach home of Gloria Guinness, a 20th century style icon and one of Truman Capote’s famous ‘Swans.’ It was designed by well known architect Marion Sims Wyeth, who designed Mar-A-Lago for Marjorie Merriweather Post in Palm Beach and, in Honolulu, designed Shangri La for Doris Duke.
Unique Homes shares history with the Ziff family. From the late 1970s to the mid 1980s, Unique Homes was owned by the Ziff Davis Publishing Company. Known for publishing Popular Aviation in the 1920s, the company’s stable of fiction and hobbyist magazines expanded into technology over the decades, including Popular Electronics and PC Magazine.
Gemini was featured for sale in the May/June 1982 issue of Unique Homes, “considered to be one of the finest in the world” at the time. Soon thereafter, it was purchased by Ziff — leaving one to wonder … did he find the home in his own magazine?