Back Page: On Spec and Span
Building and furnishing a multimillion-dollar house can be a daunting endeavor involving thousands of decisions that range from the vital to the trivial. Which architect best understands the task at hand? How large can the footprint be? What should the exterior look like? Should the dining room walls be painted in cool marine blue or covered with hand-painted seafoam green wallpaper?
Some of us embrace the experience, relishing the opportunity to express the nuances of our personalities through concrete, glass, timber, and marble. Others, however, recoil at the notion of tackling a home-building project, of adding a part-time (or, in some cases, full-time) job to an already overscheduled life. For those of us who fall into this category, a dream home is one that already exists, is finished, furnished, and available at the turn of a key. We are willing, if not eager, to pay a premium to be spared from deciding whether the drapes in the drawing room should be mauve or magenta.
Robb Report addressed so-called ready-made mansions in its September 1997 cover story, “Turnkey Luxury,” which highlighted three multimillion-dollar spec homes that were then on the market. The final paragraph of the story, while stating “no doubt” that all three homes would find buyers, carried a hint of skepticism. “If these properties sell soon, you can bet there will be some very happy builders. But if they don’t, will ‘spec’ homes of the ultraluxury kind be but a blip on the normally conservative 1990s real estate scene? We wait to see.”
What we see now is that these houses were good investments—for the buyers, at least, though Villa Tuscany was a win-win deal for both buyer and builder. The 7,400-square-foot home in the Port Royal area of Naples, Fla., sold for just over the asking price of $63 million in June 1998. It is still in the original owner’s possession, says Mark Wilson, president of London Bay Homes in Naples, the company that managed the project and sold the house. (London Bay Homes also builds luxury custom houses.) The owner has since purchased adjacent parcels of land and added an estate manager’s home with a $250,000 kitchen, a warehouse for an 86-foot yacht, and a dock that can accommodate as many as 17 boats. Wilson places the current market value of Villa Tuscany in the $15 million range.
With a purchase price of $9.5 million, La Marceaux, a 35-room French château-style mansion in Delray Beach, Fla., sold for well below the asking price of $12 million. However, the transaction did take place within a year of the article’s appearance. “The article was very effective in promoting La Marceaux,” says Jack DeNiro, owner of J.C. DeNiro Real Estate Inc. and the agent who represented the property. “It sold to a gentleman in Florida, who is still living there. He estimates that the home is currently worth $18 million.”
While the two Florida estates sold relatively swiftly, Villa Bella, in Beverly Hills, Calif., had a more difficult time of it. County records indicate that it was purchased for $6.275 million in January 2000, down from the $8.6 million price given in the 1997 article and significantly lower than the $12.5 million that the sellers reportedly sought initially. Villa Bella went on the market in an unfinished state, which likely turned off some house hunters, but there is another possible explanation for its failure to entice. The mansion was built on the site where Charles Manson’s followers murdered actress Sharon Tate, coffee heiress Abigail Folger, and three others in 1969.
Morbid histories and bargain prices notwithstanding, multimillion-dollar spec homes have survived into the 21st century. It is not a huge market, but it is a steady one, with firm footholds in Florida, Southern California, and other choice regions. The spec buyer profile has changed little over the past five and a half years, say Wilson and DeNiro. As they were in 1997, most buyers are accomplished businessmen in established industries who are seeking a second or third home—right now. “A lot of them are type A personalities who are fast decision-makers,” Wilson says. “They are used to making six-million-dollar decisions in 48 hours at their jobs, so they are totally comfortable with coming to Naples and making a six-million-dollar decision in 48 hours.”