May 25, 2012

Designer Property Porn, Upskirt Even (So To Speak)

2600 Lyon (www.SocketSite.com)

Purchased for $6,200,000 in 2007, the then 6,196 square foot Cow Hollow home at 2600 Lyon Street was taken down to the studs and remodeled over the course of two years.

2600 Lyon Kitchen

Having engaged a design team and contractor for which $1,000 per square foot budgets aren't uncommon, we’ll let you estimate the total investment while noting a number of finishes, including the designer kitchen and glass portholes between floors for light.

2600 Lyon Portholes

On the market but unlisted, on Wednesday 2600 Lyon entered the MLS already in contract with a list price of $8,800,000 for "comp" and competitive reasons we'd be willing to bet.

∙ Listing: 2600 Lyon Street (5/5.5) - $8,800,000 [byzantiumbrokerage]
Since You Mentioned It (2600 Lyon) [SocketSite]
Applegate Tran: “Pacific Heights Residence” (2600 Lyon) [applegatetran.com]

First Published: May 25, 2012 6:15 AM

Comments from "Plugged In" Readers

The kitchen is just my style.

Posted by: KC and the Sunshine Band at May 25, 2012 6:58 AM

The website is pretty "meh" for an $8.8M listing.

I walk by this place all the time on my way to the Lyon Street Steps. The location is fantastic.

Posted by: Fishchum at May 25, 2012 7:48 AM

I cannot believe that they're doing their sellers any good by limiting the audience - that is, by not making it widely known that the house is for sale. Limiting the number of potential buyers exposed to the place reduces the price for any other property that is sold. Surely the sellers have some sophistication, they must have a reason for doing this other than lining the pockets of the realtor and the buyers.

Posted by: unwarrantedinlaw at May 25, 2012 8:51 AM

Curious to see where this closes myself. This seems like a candidate for the coveted $2000+ /psf club if I ever saw it. I can think of a few people that would have taken a serious look at this place. $8.8 seems very low to me.

And another questions comes to mind. If you bought this place and spent untold amounts of cash creating this quasi-masterpiece; where in the D7 are they moving to and what will they be doing / have done to it?

Lastly, and maybe someone with better research skills than I have can figure this out better, but property shark has a record showing the same trust name as having been on the assessment roll as of 2002 suggesting that maybe the 2006 transaction was not arms length.

Posted by: eddy at May 25, 2012 9:06 AM

Eddy, the transaction was arms length. Buyer and seller have two completely different names.

Posted by: tipster at May 25, 2012 9:46 AM

Wait - what am I missing?

6.2mm to acquire, plus what I think the editor is implying could be $1K psf * 6,196sf = another 6.2mm in 'decorating' costs gets you a 12.4mm all-in basis, right?

Then you turn and sell it for 8.8mm... So the sellers took a $3+mm loss on this, and they paid for a design scheme that looks Brooks Brothers on the outside and Austin Powers on the inside?

This seems less like a masterpiece and more like a master _piece_.

What's the over-under on the buyer ripping out the kitchen?

It took me a minute on the upskirt floorholes.
"Yeah, we just bought this magnificent place. The floorholes really spoke to us..."

Posted by: soccermom at May 25, 2012 9:48 AM

This place is really ugly on the inside.

Posted by: Gigi at May 25, 2012 9:52 AM

West Elm merchandisers will be taking furious notes...

Posted by: Joshua at May 25, 2012 9:53 AM

why doesn't one of the 1%-ers of SF donate a chunk of change to replace those hideous street lights with something more in line with the aesthetic of our fair city?

and yes, don't understand the economics here... why is the developer in a rush to lock in a loss on this place? i learned yesterday - from the comments here - that we're back to the peak.

Posted by: SF-Pride at May 25, 2012 9:56 AM

This is some straight up tacky interior design

Posted by: mikey woodz at May 25, 2012 9:57 AM

Two things don't make sense:

Economics: This place needed a lot of structural work due to groundwater issues (it's at the bottom of the hill), and a lot of previous home improvements looked DIY by someone reading a Time-Life book. The redo looks fairly expensive, with the portholes, finishes etc. Don't see how this pencils-out financially.

Marketing: Why wasn't this placed marketed more broadly? There's little quality available at this price point in D7. Clearly, not to everyone's tastes, but still.

And yes, it's difficult to imagine the kitchen lasting 10 years, let alone 10 weeks...

Posted by: Joshua at May 25, 2012 10:10 AM

What this a spec project? If so, I don't get it. Very taste-specific with the portholes and color choices. To me, it already looks dated. To sell this, you have to find someone who a) has the money, b) wants modern, and c) wants this type of Dwell/West Elm modern.

Can someone explain this type of project? Seems high risk.

Posted by: jlasf at May 25, 2012 10:39 AM

I like the house. So there. :)

Does anyone have the official SqFt?

Posted by: eddy at May 25, 2012 10:39 AM

Okay, I thought about this more. I set aside my personal bias against the decor and assume there is always a well-to-do cosmopolitan couple in SF who want a house that feels "fabulous" from the moment they walk in.

The listing agent thinks the house will trade north of 13mm. Rather than merely underprice the house to incite an auction event, he lists it as 'pending' and calls the usual suspects for big money buyers. "I am about to sell this house for X psf. Don't you think your big $ buyers should see it?" It's an even-more-urgent auction event.

Sure enough, the 'pending' listing serves as a stalking horse (potentially even a shill buyer) in a bidding war, and the palace trades at the intended 13mm price...

Is this what's going on here?

Posted by: soccermom at May 25, 2012 11:37 AM

Just my personal opinion:

I hate when the inside doesn't match the outside. You can do modern interpretation of the era the house was built in.

Posted by: wc1 at May 25, 2012 12:00 PM

The exterior is so beautiful and dignified.

The inside is HORRENDOUS !

So ugly.

Space planning ?? The kitchen is a waste and colors are super heinous.

Someone likes it - it is sold- so who cares what I think.

Will NEVER EVER hire Applecart and Tran to design anything- not even my dogs poop-bin.

Posted by: jmwt at May 25, 2012 12:08 PM

What the hell...

Posted by: sf at May 25, 2012 12:12 PM

@soccermom

Pending can only last a very short time, and if a shill deal falls-out of contract, that raises questions for other prospective buyers. That's why sellers prefer all-cash, very short close offers. The more deals that fall-through, the more questions are raised for future buyers. Any agent following your approach is taking a big risk.

As for this property, methinks it's likely sold. Bigger questions are why is the seller selling, and who will do the re-remodel?

Posted by: Joshua at May 25, 2012 12:19 PM

Omg, that's a fugly kitchen . . . and very unimpressive interior for $9M.

Posted by: Whatever at May 25, 2012 12:31 PM

I'm more interested that Steven is also listing 3800 Washington for 25 million. I was wondering when that would come back on the market...

Back to 2600.... I think the buyer did well here. There are just a few cosmetic changes that need to made... Namely getting rid of the hideous kitchen, but everything else looks, well, maybe not tasteful, but kind of cool. When I saw the home years ago, I remember it has a "distinctive" Miami Vice 80's style to it, so really anything is an improvement.

[Editor's Note: With respect to 3800 Washington: Halsey Minor’s $20,000,000 "Abandoned" Mansion Returns.]

Posted by: Denis at May 25, 2012 12:34 PM

I feel like this house has a bit of an identity crisis. It's old school on the outside, mostly modern on the inside, yet a few of the rooms have more of a modern feel than others. I have to agree with the general consensus that the kitchen is beyond hideous. Chartreuse, chocolate brown and harvest gold should not be brought back as a viable color combo. It was bad in the 1960s and is just as bad now. Not to mention for a house of that size there is a dearth of countertop space as well as storage.

As for the floor portholes, only a man would have thought this was a good idea. I don't need people viewing my lady bits from the floor below. This I would cover immediately with rugs.

Posted by: Lori at May 25, 2012 1:23 PM

The portholes keep gnawing at me...

If memory serves correctly, the house had low ceilings...perhaps the portholes are intended to draw your eye down, to forget about the height issues???

I imagine sooner or later we'll all be treated to a lecture on "good design" from a certain modern queen.

Posted by: Joshua at May 25, 2012 2:12 PM

I have loved this home from afar for years. The inside is so very disappointing:-(

Posted by: Just Looking at May 25, 2012 2:14 PM

The outside is not original.

The exterior recieved a major redesign in the late '80s. Prior to the redo, it had a very boxy, stucco, modern Pueblo like, exterior. Not sure if even that was original.

Posted by: inmycountry at May 25, 2012 6:39 PM

I lived across the street from this property for several months in late 2009. Work on the house had been completed by then. Our windows looked down into the house and we could see that it was furnished very sparsely with really cheap furniture. One of the rooms was filled with nothing but toys! Every once and a while we'd see someone come in and out, but there wasn't much activity otherwise, almost as though the people living there were just house-sitting. We wondered about it quite a bit--the whole situation seemed a bit strange.

Posted by: Fury at May 25, 2012 7:30 PM

The house looks staged for infinite # off seating areas. I lost count after 16 (including indoor and out plus single chairs placed strategically near contemplation zones such at the entry and top of stairs). Take away all the furnishings (including 40 chairs + 9 couches) and you pay lots for a glorified stucco box and an awful looking kitchen.

Posted by: Eskimogirl at May 26, 2012 7:01 AM

Incredible house! The SF market is on fire! Can you imagine being a renter? Yikes.

Posted by: Lady at May 27, 2012 2:39 AM

Well, if it sells at asking, the owners will have lost millions of dollars on it that they wouldn't have lost had they rented (yikes!), so they'll imagine being renters in their wildest dreams.

Posted by: tipster at May 27, 2012 11:09 AM

Well I have to admit that as a long time renter here in san francisco that my husband and I have decided that we simply are not going to be able to afford to purchase the home of our dreams in the city. We were holding out for the downturn and we almost bought a place last year but we held out in hopes the market would continue to decline to get more for our money. We have our rent locked in and our landlord cannot raise the rent on us so maybe we will see what happens. But we are starting to look over the bridges. We wish we had bought a home in the east bay last year as prices are going up over there now. We cannot wait much longer as out family is growing. All this talk about renting and owning is a bit disheartening for fairly well-to-do first time home buyers. It is too bad there is not a Socketsite for the east bay and marin. This website is useful even if it is sometimes depressing to look at all these wonderful homes that we cannot afford.

Posted by: renterforlife at May 27, 2012 4:02 PM

So facebook is down below 30 as I write this (and heading for 29), and thousands of fbers got RSUs. All of them will owe $19 per share in taxes for 2012, all of them were paid much lower than market salaries in exchange for these oh-so-valuable RSUs, and almost all of them are underwater when you take into account the taxes and the lower salaries it took to get them. Can't reprice an RSU, either, so they're all screwed.

Why bring this up in this thread? Because, although soccermom had one theory about the sale of this house, with a little sleuthing, facebook, along with Zynga and Yelp, all down hard today as the Social media bubble pops, provide a different theory of this house is being sold so quickly.

A little sleuthing through google tells a story. You can identify the owner of this house (successful technology executive), and then check to see if he has a mortgage. He does have a mortgage on this place, so he's got money, but not in unlimited amounts.

A search on his name brings up the fact that he, with two others, started a so far successful social media photo sharing web site, funded by those three people. No VCs or angels: self funded.

A search on that company name plus the word "funding" gets to the heart of my theory on the sale of this place. Last year, we find a quote from the president saying they would need funding by early 2012. That's basically now. But something is missing: an announcement that they GOT funding.

So now, read between the lines. Facebook comes out and falls flat and suddenly, almost immediately, this home gets put on the market at a very attractive price that would all but guarantee a quick close to provide cash to a guy self funding his own company who is out of funding options. Hmmm, what could that mean?

Could it be that funding for his company was close, but when facebook made it clear that the social media bubble was collapsing, that funding for this type of company dried up at anything close the the valuation he was hoping for? And so now this guy is scrambling to sell his house to keep his company afloat?

So it appears, at least to me, that this is the true facebook effect: instead of people buying homes because of facebook, people are instead, selling them because of Facebook!

Nothing more than a theory, of course. But one that fits very well with the facts. I'm sure people will hammer away at it, which is their right, but you'll note that soccermom's factless theory went unchallenged, and so one should question the motivations of the people who will no doubt scream about this one, based on an awful lot of very well researched facts.

Posted by: tipster at May 29, 2012 10:40 AM

Wow, an impressive convoluted made up theory..

So, FB IPO didn't skyrocket on Friday so he decided to sell his house to fund his company... and he had an $8.8 million place sold by Wednesday? Impressive work by the realtor.

Posted by: R at May 29, 2012 10:58 AM

I wonder how many znga employees will end up owing more on taxes from their RSUs than they can get from selling? FB isn't there yet, but who knows?

Posted by: anon at May 29, 2012 12:22 PM

I wonder how many znga employees will end up owing more on taxes from their RSUs than they can get from selling?

None of them will. How can that even happen?

Posted by: NoeValleyJim at May 29, 2012 6:06 PM

In escrow firm.

Posted by: Eddy at May 29, 2012 9:40 PM

The sale of 2600 Lyon Street closed escrow today with a reported contract price of $8,800,000. Assuming no significant change in size since the property was purchased in 2007, call it $1,420 per square foot.

Posted by: SocketSite at May 31, 2012 1:54 PM

Ignoring the P&L for the seller here which no one really has any idea about, I'd say that this is a pretty fair, if not decent outcome. I think this home might have commanded a bit more on the open market. I guess we will never know. I do know that there are a few buyers currently looking for modern homes in D7 so I guess they either looked / passed or never saw this home. The editor puts this at about 6200 square feet. I still think this could have gotten a little more on the open market. But from the comments here this was obviously not to everyone's tastes.

Posted by: eddy at May 31, 2012 3:05 PM

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