October 2, 2008
The SocketSite Scoop On 37 Raycliff Terrace (A.K.A. 2799 Broadway)
While we first heard about the deal a few weeks ago, as it was a private transaction we made the decision not to publicize it until the deal was done. Now it is. And if our original source is correct, this really was a case of rich foreign buyers.
The tale in a nutshell as we were told: wealthy British couple take a fancy to 37 Raycliff Terrace (a.k.a. 2799 Broadway) which isn’t on the market (not even quietly); uberagent Malin Giddings rings said doorbell (those ‘no solicitation’ signs never work) and presents a “make me move” kind of offer ($29,000,000); owner graciously accepts.
Of course the fact that Malin represented the sellers when they bought the lot back in 1998 for $3,250,000 probably helped as well. And you've got to love the irony.
UPDATE: And if a plugged-in reader is correct, said British buyers are the founders of social networking website Bebo (which was sold to AOL for $850M earlier this year).
∙ What’s The Scoop On Foreign Investment In San Francisco? [SocketSite]
∙ Recap: What’s The Scoop On Foreign Investment In San Francisco? [SocketSite]
First Published: October 2, 2008 12:15 PM
Comments from "Plugged In" Readers
That's basically how Ty Warner (of Beanie Babies fame, and lately of hotel magnate fame, and Chicago penthouse fame) bought an oceanfront home in Santa Barbara. The home is one of only 4-5 along a bluff adjacent to the Four Seasons Biltmore property, which he had recently bought in Santa Barbara (Butterfly Beach). I understand he followed the gardner in through the gates and waited until the owner got home, whereupon he was told the property was not for sale -- I guess he offered a "make me move" price.
Posted by: Fundy Mental at October 2, 2008 12:44 PM
Re. this property, just going by the outside, it's certainly not my fav. in the area. I take walks around there and if I were to do a "make me move" type offer, it certainly wouldn't be for this place -- just not enough character I guess.
And if you did an "offer he couldn't refure" offer instead of a "make me move" offer I bet the buyers could have purchased it for far less.
Posted by: Fundy Mental at October 2, 2008 12:50 PM
Interesting story about rich foreigners, though with the dollar to euro rate at **1.37** and falling, it's hard to imagine this will continue.
What would be REALLY interesting is if the owner of the property was in the financial services industry and needed to sell. Of course, if propertyshark listed the owner of the property at that address as William Matthes, and a google search on that name brought him up as the managing partner of Behrman Capital, that would be just too perfect.
Posted by: tipster at October 2, 2008 12:54 PM
Why is it that the streets in this picture are squeaky clean, yet there's doo doo, urine, and passed out drunks all over Downtown/TL. We all pay the same 1.14% property tax rate. What gives?
Posted by: Screams of Discrimination at October 2, 2008 1:00 PM
tipster, would you elaborate? I'm more than a tad ignorant of these things.
Posted by: inthemarket at October 2, 2008 1:00 PM
where's the garage?
Posted by: Ryan at October 2, 2008 1:09 PM
Thank God, we need the foreigners to overpay in order to help our balance of trade.
Posted by: diemos at October 2, 2008 1:10 PM
Tipster hit the nail on the head. I wonder if in light of the current economic situation the "offer" lead Mr. Matthes to cut his losses and sell?
Posted by: Ryan at October 2, 2008 1:17 PM
Hmm.. Yes, that's Matthes home. They finished remodeling it, what, back in 02 maybe? I think cashing out was a smart move here. 29 million is a good comp for outer Broadway. As far as I know, it's the most expensive home ever sold on that street and it's presumably in move-in condition. Obviously, this should cause sellers in that area to re-think their pricing - 2901 Broadway, 2950 Vallejo, etc...
Posted by: sleepiguy at October 2, 2008 1:38 PM
so "outer broadway" is a nicer area or less favorable? Thanks for advising. I am not familiar with that area.
Posted by: ester at October 2, 2008 2:13 PM
Regardless of whether Mr. Matthes was in need of cash, he's getting something like a 20% annual return on a 6 million real estate investment (including construction) in the midst of a major downturn. Sounds like a smart move to me.
Posted by: Jake at October 2, 2008 2:18 PM
Why no two door garage? Buyer got screwed.
Posted by: sf at October 2, 2008 2:38 PM
"where's the garage?"
Entrance is on Raycliff.
Posted by: ExAgent at October 2, 2008 2:42 PM
I remember living in London when the Russians moved in. My Landlord was given a generous "make-me-move" offer along with a mention that it would be a shame for such a beutiful house to spontaneously combust.
Posted by: HappyRenter at October 2, 2008 3:11 PM
Outer Broadway AKA Billionaire's Row. Where you live if you have "old money" or want to associate with those that do.
Posted by: SausalitoRes at October 2, 2008 3:14 PM
Awesome story. Even with funny money USD exchange rates -- $29mm is a lot of money.
Posted by: eddy at October 2, 2008 3:16 PM
I'm more interested in why such a confidential situation would be leaked; and what the leaker's motivation is here. If I were Malin -- I'd not be too happy as I'm sure there was a non-disclosure on this sale. Apparently this leaker is really trying to get the word out as its posted on another RE blog as well.
Posted by: eddy at October 2, 2008 3:20 PM
Is this "outer" = west of Divisadero? On broadway, green, vallejo etc??
what is the "outer Broadway" of RH?
Thanks for the info. I am so not familiar with these, so you can probaly how much money I have!!!
Posted by: ester at October 2, 2008 3:40 PM
Yeah, outer Broadway is also our Gold Coast. It's just the three blocks of Broadway west of Divisadero and ending at Lyon St.
Posted by: Sleepiguy at October 2, 2008 3:46 PM
Great question Eddy.
Reminds me of a story. Fried of mine had this beautiful car, really nice, old 1940s romance movie car- big and swoopy, beautifully restored down to the stitching.
But he fell on hard times and didn't want anyone to know. So he called an antique car dealer he knew and told them that he was interested in selling. The dealer made the arrangements. When the buddy sold the car, he made up a preposterous story about how some guy opened up a briefcase full of money in a parking lot and made him an offer he couldn't refuse.
Of course, it was a lie. The car was so attached to his persona, he needed a good story to tell and he didn't want to admit that he had fallen on hard times. So he repeated that story a thousand times. The story made it seem like he hadn't really fallen on hard times, he just had continued a string of wonderful luck.
I'm sure that has nothing to do with this situation. Nothing at all. Just a fun story. Pay no attention to my story. Really. The details of $29MM sales are frequently blabbed all over the internet. Shouldn't raise any suspicions at all...
Posted by: tipster at October 2, 2008 3:48 PM
Tax records list the new owner as: Birch Michael / Birch Xochiltzin
*drum roll*.. here's our buyer!
Posted by: SFer at October 2, 2008 4:00 PM
at least he's not handsome. then we'd have to be jealous.
Posted by: pvc at October 2, 2008 4:11 PM
The bebo folks!
Though technically true, it doesn't really count as a rich foreign buyer -- it's more like a google-industrial-complex buyer. AOL bought these folks in a death-throw acquisition to get a "social network" so that they could stay relevant. Only youtube had better timing.
Posted by: dub dub at October 2, 2008 4:11 PM
the bebo guy!!! I love you guys you always break it down! SFer give me an address so I can send a bottle of your favorite your way. This is too good.
I am close in age with our man of the hour and I'd never choose to live here, but hey to each their own!
Posted by: Ryan at October 2, 2008 4:29 PM
Tipster, of course what you imply may be true, but my guess is that this got posted exactly because it is so unique (terms, price, current economic conditions). Realtors involved are bound to discuss something like this, possibly even thinking it could have a positive affect on their business.
[Editor's Note: It seems to be a "for the record" day (in more ways than one), and so for the record...our source isn't in "the industry."]
Posted by: Jake at October 2, 2008 4:29 PM
Funny thing is it's not nearly the biggest house in the neighborhood.
Posted by: Rocco at October 2, 2008 4:34 PM
I still get surprised at how many folks there are out there, sporting middle-finger money, because they started a website I've never even heard of and flipped it to some VC clown shop. I mean seriously - "bebo" - what the hell is that? Wasn't that a Star Wars character?
Anyway, I'd like to invite all of you to visit my new networking site called KleebPlooop. While there, please use a fake e-mail address to register as a user. That way I can sell it to Google in 2 weeks and use the $400 million in proceeds on a yacht named "Algorithm" and a trophy home in Tbilisi. Thanks.
Posted by: Dude at October 2, 2008 5:48 PM
so which one (ones) is??
Posted by: ester at October 2, 2008 5:56 PM
The house does seem to lack a lot of character the more I look at it. Still a beautiful home.
Posted by: sf at October 2, 2008 9:55 PM
Looks like an apartment building with an ostentatious entryway.
There are certainly more attractive houses on Outer Broadway.
But, to paraphrase, beauty is in the eye of the stockholder.
Posted by: jlasf at October 3, 2008 5:26 AM
Looks like the Beebo guy wants to hang out with Robert Mailer Anderson and Nicola Miner Anderson (and their jet set 30 something friends). He might even get on the Getty party list (I heard they always invite the neighbors)
Posted by: PresidioHtsRenter at October 3, 2008 8:44 AM
“29 mill. Bla bla... Rumours! Jane does not think this is confirmed and thinks it is far far over that figure. Malin is not talking.... Record Breaking is the word on the Street! Worth every penny. New construction on the SF’s Gold Coast.... One of a kind! Must be over 29 mill.!!!
Posted by: Jane Knows Best at October 3, 2008 8:48 AM
Screams of Discrimination wrote:
> Why is it that the streets in this
> picture are squeaky clean?
Because rich people don't like dirty streets. I sweep the street in front of my apartment and often see the wife of a big time VC firm a few doors down doing the same thing. If you drop a single piece of trash in Presidio Heights the next person walking by will probably pick it up. In poor neighborhoods the next person walking by will probably just drop another piece of trash )or a 40 oz. bottle)...
Posted by: PresidioHtsRenter at October 3, 2008 8:50 AM
I had a chance to drive by this house today - it is a very impressive structure. The current assessed value is $3.8M for the land and $2.7M for the improvements. The lot area is 7,100 square feet and Property Shark shows the structure at 7,880 square feet. It looks larger than that - maybe 10K+. Looks like the construction was done back around 2003 - the original 5K square foot house was demo'ed. So the total construction cost for the new house was about $250 per square foot?
Posted by: FSBO at October 3, 2008 1:33 PM
$250 per foot my a$$. This cost 10 million minimum, probably a lot more. I don't remember the contractor though... Was it Van Acker? They've done pretty much everything else on that block. Obviously, the owner didn't report to the city exactly what they spent on the property.
Posted by: sleepiguy at October 3, 2008 1:59 PM
sleepiguy - that's what I was thinking too. Even at $10M, it's still a pretty good ROI if the rumored price is correct. Does the Phil Ting often miss by that much? (a rhetorical question)
Posted by: FSBO at October 3, 2008 2:24 PM
See my above post total project cost, including land, in the 6 - 6.5 million range. The house is indeed "only" 7,880 square feet. That's over $800 per square foot, again including land, for the early 2000's. Quite a pricey project for that period.
Posted by: Jake at October 3, 2008 5:09 PM
Jake - I was trying to focus in on the construction costs since it has been discussed/debated here that high-end costs can be in the $400 - 600 psf range. This house looks like a huge 7,880 square feet - it probably has the cubic volume of a typical 10K square foot home (if there is such a thing as a typical 10K square foot home). The lot with the old house was purchased in 1999 for $3.7M. The building permits are all dated in 2003 & 2004 so the construction is pretty recent. The assessed value of the improvements were initially about $2.6M. So the construction costs must have been about $300 per square foot for this high-end, high-cubic volume project. I thought that many might find that figure too low. Hey, I'm not arguing that it should be higher - I've recently been involved in high quality projects under $200 psf and others as low as $50 psf - just not in San Francisco.
Posted by: FSBO at October 3, 2008 5:35 PM
I find it hard to believe you can call ANY project "high quality" when you're talking under $200/sf..
that's ridiculous. $50/sf just gets you ceramic tile installed, or wool carpet.
obviously, there are some extreme and varied definitions of what "high quality" really means.
to me, it means starting at $400/sf and going up. some of the high end kitchens I design are in the range of $500-800/sf., just to give an example. again, I'm talking SF prices, not some dumpy suburb like Tracy or Stockton. we're not talking tract housing here.
Posted by: noearch at October 6, 2008 2:30 PM
noearch, so what do you think 37 Raycliff cost to build? Say, $6M+ (8K sf X $800 psf)?
Posted by: FSBO at October 6, 2008 2:59 PM
oh yea...easily $800/sf..I saw this get built. steel frame, massive foundations, completely high end finishes..
Posted by: noearch at October 6, 2008 3:46 PM
Posted by: SocketSite at October 9, 2008 5:54 PM
The best part of this is that AOL just offloaded Bebo for less than $3m dollars: http://online.wsj.com/article/SB10001424052748704198004575310782837615268.html
The founders took home two orders of magnitude than that, netting themselves this phat place. The greater fool theory in action...
Posted by: Nils at June 16, 2010 10:33 PM
I've said this before: The world has changed from only a few years ago.
A company worth $850M on "promise" two years ago is never going to get that valuation now.
Although some tech companies in the valley are public, and a handful are even doing well, most are private, and a huge number of those have been chasing some sort of social networking angle. The value of those companies has just plummeted.
The head of Bebo two years ago buys one of the nicest places in town. Today, he would have gotten $50,000 from that sale for 5 years worth of work at a lower than typical salary, barely a down payment on a modest condo.
The world has changed from two years ago. Most people haven't realized this yet, but they will.
Posted by: tipster at June 17, 2010 7:24 AM