March 30, 2011
$75 $100 Million Dollar Los Altos Hills Mansion
According to the Wall Street Journal, the sale price for the rather large Los Altos Hills home recently purchased by Russian investor Yuri Milner was $100 million, 30 percent more than was previously reported.
The Los Altos Hills mansion runs more than 30,000 square feet and was completed around 2008, according to an architect who helped design the home. Mr. Milner, who heads Digital Sky Technologies, whose investments include Facebook Inc., Groupon Inc. and Zynga Inc., bought the mansion through a limited-liability company. The home was not on the market, according to people familiar with the deal. Mr. Milner has no immediate plans to move into the home, a spokesman said. The sale was previously reported by the website TechCrunch; it and other outlets had reported the sale at $70 or $75 million.
The symmetrical limestone mansion with San Francisco Bay views was inspired by 18th-century French chateaux; the design process began around 2001, according to architect William Hablinski, who designed the home with his then-partner Richard Manion. “There wasn’t a real budget,” Mr. Hablinski said of the home, which has a ballroom, home theater, wine cellar and indoor pool. Public records put the house at about 25,500 square feet with a 2009 completion date.
Believe it or not, the purchase was
hedged seller financed with a $50 million dollar note.
First Published: March 30, 2011 3:45 PM
Comments from "Plugged In" Readers
Posted by: 47yo hipster at March 30, 2011 4:50 PM
Dirty money has to pay extra.
Posted by: EH at March 30, 2011 5:22 PM
Do not want.
Posted by: Delancey at March 30, 2011 5:35 PM
All cash...no wait. It's not!
Posted by: sfrenegade at March 30, 2011 5:38 PM
What's hard to believe is that I'd ever see a $100M place and not be jealous. At all. Should have bought the St. Regis penthouse, a place on the gold coast, and a mere $25M place in the Hills...
Posted by: Michael at March 30, 2011 5:40 PM
By the way, speaking of not living in a property, did anyone see this blog post on SFGate about how many homes in SF are vacant? The figure for SF is higher than surrounding counties, but barely above the California average. The figures for San Mateo and Santa Clara Counties are much much lower than CA average. I wonder what counties are significantly higher?
Posted by: sfrenegade at March 30, 2011 6:00 PM
sfrenegade...I'm assuming that the big inland foreclosure counties are where the huge vacancies are. I'm also assuming that in SF part of the reason for significant vacancies is small landlords/owner occupants pulling units off the market due to rent control. I believe it's been documented that there are a lot of inlaw apartments and the like in two-three unit buildings that are vacant because the owner occupants simply don't want to deal with rent controlled tenants.
Posted by: curmudgeon at March 30, 2011 6:15 PM
Makes me think about this:
Posted by: Mike at March 30, 2011 6:30 PM
curmudgeon, thanks for the response. You're right, I wouldn't be surprised if San Bernardino County or Riverside County were towards the top of the list, for example. It makes me wonder whether longitudinally viewing this data would show that SF is normally higher than average, but is now at average because of the housing bubble, or if it's always around average.
What's interesting, however, is that large parts of Contra Costa County were affected by the bubble bursting, but Contra Costa is still lower than Marin overall. Of course, northern Marin is affected territory itself, and southern Marin isn't particularly high in population.
One possible correlation that jumps out at me based solely on the data in this blog post is that counties with a higher persons per household appear to have a lower vacancy rate, but that is not surprising. Whether the correlation has statistical significant, I don't know.
Posted by: sfrenegade at March 30, 2011 6:34 PM
^significance, not significant
Posted by: sfrenegade at March 30, 2011 6:36 PM
Census data only reports occupied homes as of a certain date. This creates some peculiarities. If a landlord has a rental that is between tenants on that particular date the property is considered vacant. And, of course, most people with multiple homes will have to report all but one of them vacant (unless they have live in staff in each of them).
So a high vacancy rate per the census can mean several different things, a high rate of foreclosure, high rental turnover or a high rate of multiple home ownership, all quite different.
Posted by: Salarywoman at March 30, 2011 6:56 PM
But I also like savings the money.
Posted by: artema at March 30, 2011 8:09 PM
About 10 or 12 years ago, just before the last recession, SPUR did an economic base study of San Francisco. One of the inadvertent facts that popped up was that there were 10,000 vacant housing units in SF, at the height of a boom. This was an incidental finding and SPUR did not attribute an causality, since that was not studied. But plenty of people could surmise that it is our dysfunctional rent control system. It is not so much the price control but the inability to get a problem tenant out. A great many housing units in SF are in duplexes and triplexes where the owner resides, and once the mortgage is paid off, many of those owners keep the units vacant because of a fear of what could happen...what was that movie a few years back? 10,000 units at the time was a ten year supply of new housing. Imagine if 10,000 more units were available...this would lower rents much more than rent control.
Posted by: Jim at March 30, 2011 8:20 PM
EH... Milner is one of the few russian billionaires who didn't steal his money (actually the only one). Smart guy, invested well. There may be some stuff behind the scenes, but he is not one of the oligarchs who ripped off the communist government during the transition.
But then again, Twitter is ripping off the SF commie govt. right now, so it comes full circle back home.
Posted by: Jimmy C at March 30, 2011 8:24 PM
This sale just does not make sense to me... How did he see the value of this nothing special home to be over $3,300 per square foot. Especially for Los Altos!
Posted by: Richard B at March 30, 2011 8:53 PM
I bet the Realtors can't wait to plug the $100mm "sale comp" in to the MLS and start telling people that "the average home price is going up" "buy now or be priced out forever"...
Posted by: FormerAptBroker at March 30, 2011 9:11 PM
"I'm assuming that the big inland foreclosure counties are where the huge vacancies are."
I poked around the census site to confirm some information on Amador County and while I couldn't find the 2010 information, as of the 2000 census, Amador County had an 85% occupied housing rate and a 15% vacant housing rate (with 10% catagorized as being for "seasonal, recreational, or occassional use").
The SF numbers for 2000 were 95.1% occupied, 4.9% unoccupied (1.1% seasona/recreational/occuassional use). For 1990 the vacant housing was 7%.
To look up the 2000 or 1990 info you go:
Select your county or city from the drop down, hit go, then follow the link on the right that says "Browse data sets for (whatever county/city you chose)". Then select the "General Demographic Characteristics" for 2000 or "General population and housing characteristics" for the 1990 numbers.
I assume they will eventually include the 2010 census on these pages.
Posted by: Rillion at March 31, 2011 9:52 AM
Thanks for the input, Salarywoman, Jim, and Rillion.
"I couldn't find the 2010 information, as of the 2000 census, Amador County had an 85% occupied housing rate and a 15% vacant housing rate (with 10% catagorized as being for "seasonal, recreational, or occassional use")."
Good point -- I bet some of the Tahoe counties like Nevada, Placer, Alpine, and El Dorado are similar in terms of seasonal, recreational, or occasional use.
"The SF numbers for 2000 were 95.1% occupied, 4.9% unoccupied (1.1% seasona/recreational/occuassional use). For 1990 the vacant housing was 7%."
That 1.1 out of 4.9 makes me think that it's more rent control and rental turnover than 2nd homes. Interesting comparison to 1990 as well -- that was pre-recession and close to a peak economy.
Posted by: sfrenegade at March 31, 2011 10:03 AM
Here are the raw numbers for 1990 & 2000
Total Housing Units: 328,471
Occupied: 305,584 93.0%
Vacant: 22,887 7.0%
Seasonal/Rec/Ocsnl: 1,509 .5%
Total Housing Units: 346,527
Occupied: 329,700 95.1%
Vacant: 16,827 4.9%
Seasonal/Rec/Ocsnl: 3,762 1.1%
Total Units: +18,056
So I don't think it is all just people converting rentals into seasonal. During the 90's a lot of the unused housing got put into use to help absorb the growing population. And while the percentage of seasonal housing doubled, it still remains just a small share. I really want to find the break out of the 2010 numbers now as we'd get a much fuller picture of how its changed over time with the various economic conditions. Since the 2000 census was done before the bust, I think the low unused housing is a result of the high rents that people could get back then. While rent control does effect the supply/demand equation, to me it still looks like the current market price for rents is having a greater effect on percentage of vacant housing then frustration with rent control. Was rent control less onerous in 2000 then 1990? I think it was actually more onerous in 2000 as it had expanded to include the 2-4 unit owner occupieds back in 1994. I think that the hot rental market of the late 90's caused more places to be occupied while at the same time rent control law changes could have driven up the "seasonal/occasional" number, but that the hot rental market had a greater impact.
It seems like the 2010 numbers are more in line with the 1990 numbers but I'd love to get the raw numbers to drill down into.
Posted by: Rillion at March 31, 2011 10:36 AM
Separated at birth: Spelling mansion in LA.
Why do so many nouveau people build chateaux? They try to look like royalty and end up looking like "The Beverly Hillbillies."
Posted by: jlasf at March 31, 2011 10:46 AM
"Milner is one of the few russian billionaires who didn't steal his money (actually the only one). Smart guy, invested well. There may be some stuff behind the scenes, but he is not one of the oligarchs who ripped off the communist government during the transition."
That's a pretty credulous assertion. He made his bones under Khodorovsky in the 90s.
Posted by: EH at March 31, 2011 10:59 AM
Just one word: EXCESS......and a lot of it.
I hope the fortress walls are thick and high when the villagers come-a-hunting with their flaming torches !
Why do people with this amount of money feel the need to live in mansions where they could not possibly use 1/10 of the space ? Guess it fuels the economy when you have to hire a staff of 20 just to maintain the residence.
Imagine the good they could have done by spending $5 or even $10 million on another mansion home and donating the rest to non-profits, medical research or even some to the recent Japan disaster. Guess it will take a lot of individuals like me who donate $100 to make up the difference.
Posted by: radar at March 31, 2011 11:03 AM
Why do so many nouveau people build chateaux? They try to look like royalty and end up looking like "The Beverly Hillbillies."
I've noticed this as well. If I recall correctly, when David Duffield, the founder of PeopleSoft, first proposed his 72,000 ft² monster mansion in Alamo, it was also a faux-chateaux.
Posted by: Brahma (incensed renter) at March 31, 2011 12:46 PM
Why do people with this amount of money feel the need to live in mansions where they could not possibly use 1/10 of the space ?
I doubt that "usability" is the criteria they use in choosing their size of domicile, it's likely more what the property says about them. People at this level of resources operate under different rules than people who comment on internet sites do.
Posted by: EH at April 2, 2011 9:50 AM
>>Why do so many nouveau people build chateaux? They try to look like royalty and end up looking like "The Beverly Hillbillies.
Because people with that money tend to have the foresight to consider that if they're already dropping millions on building a rather unique mansion, it's a good idea to go with a tried-and-true design that will still look good 10, 20, 50, and 100 years from now. And the major cost of this particular home I believe is in the interior features and furnishings...stuff that the public will never see, so there goes any claims of ostentatious aggrandizing to the masses.
Posted by: no-matter at May 13, 2011 5:12 AM
"...design that will still look good 10, 20, 50, and 100 years from now.
You've got to be kidding. Every faux-chateux and bogus Tuscan built in the bay area recently looks like a cross between stucco McMansion and stucco office building. They're comical because their materials and construction methods always show through.
Better to go with contemporary design that is true to its materials and construction methods. Sure it will look dated about two decades later but if the architect was inspired then its looks will endure long past the twenty-year doldrums.
The only exception to the faux folly are faithful reproductions of local classics like faux-vics because if done right the same materials and techniques used by the historic craftspeople can be reproduced. I guess you could do the same with a faux chateaux but the cost of the hidden steel moment frame to prevent those stone walls from becoming a pile of rubble would be very large.
Posted by: The Milkshake of Despair at May 13, 2011 7:36 AM
From The Mercury News today, Russian tycoon's Silicon Valley mansion worth half its $100 million purchase price, assessor says:
The Santa Clara County Assessor said Tuesday that the Los Altos Hills mansion the Russian billionaire paid $100 million for last year is worth a mere $50 million.If you read the entire story, you'll find the name of the LLC that Milner used to buy the property, but not the name of the expert real estate buyer's agent who presumably helped out with valuation before making an offer and presumably proposed the offer price.
The mansion's purchase…made headlines last March as the largest amount ever paid for a home in the U.S. Perched on a hill in Los Altos Hills, the 17-acre estate has a commanding view of the Bay Area.
Assessor Larry Stone said Tuesday the house has a fair market value of $50,270,000, following an extensive survey of other mansions as far away as Beverly Hills.
Did Milner pay too much for the lavishly-appointed mansion?
"Overpaid' is relative and judgmental," said Stone. "He paid more than the fair market value."
The assessment means a big property tax break for Milner — about $600,000 in taxes instead of $1.2 million…
His Los Altos Hills home, one of the largest in Silicon Valley, is a 25,545 square foot mansion that features a ballroom, game room, maid's room, library, two dining rooms, an indoor pool, sauna and spa, two three-car garages, a car wash, tennis courts and 14 bathrooms. There's also a 4,613 square foot guest home.
Posted by: Brahma (incensed renter) at July 3, 2012 4:49 PM