Empires of the Sun

April 9, 2013

When it comes to buying second homes, shoppers often flock together. Here is why Chicagoans are crossing Lake Michigan, California tech execs are hitting the beach in Tahoe and New Yorkers are heading south.

By LAUREN SCHUKER BLUM, MATTHEW DOLAN and CANDACE JACKSON, WSJ.com, April 4, 2013

Silicon Valley Reboots at Tahoe

The hottest new tech-industry accessory? A house in Tahoe.

Venture capitalist Steven Stull recently paid $11.875 million for a 10,000-square-foot waterfront estate on Lake Tahoe in Incline Village, Nev. David Duffield, co-founder of Workday, paid $25.5 million for another Incline Village estate, according to public records. It was the largest sale on the Sierra Nevada lake since 2008, says listing broker Kerry Donovan.

silicon valley reboots at tahoeBrokers in towns surrounding the large freshwater lake, which spans the border of California and Nevada, say sales have picked up dramatically in the last six months, as spillover from the Bay Area’s exuberant housing market has finally reached the area. The Nevada side of the lake has gotten an additional boost since California passed Proposition 30, hiking income taxes on the wealthy and increasing the appeal of owning on the zero-income-tax Nevada side.

Brokers say sales are surging on both sides of the lake. “December was the strongest December we’ve ever seen in the business,” says Susan Lowe, the corporate broker for Chase International, pointing to data that stretch back to 1990. According to the agency, the first quarter of 2013 saw $246.4 million home and condo sales in the area, up more than 70% from the first quarter of 2012.

Jim Telling, a partner at East West Partners, which developed the Village at Northstar, says the company has seen a 72% increase in the number of home sales since 2011. Average prices rose to $869,000 from $531,000, spurred by a large number of $1 million-plus sales.

Kate Wormington, a 17-year Apple veteran who left in 2010 to raise money for an education nonprofit, and her husband, Dan, a current Apple employee, recently snapped up a fully furnished, four-bedroom home that was listed for $2.1 million. The ski-in/ski-out property is at Constellation Residences at Northstar, a Vail-operated ski resort in Truckee, Calif., that was recently overhauled to include boutiques, a skating rink and a Ritz-Carlton. Ms. Wormington, a mother of two, says she liked the area’s friendly vibe as well as its amenities, such as ski valets and a chef-run s’mores bar. “It is amazing to me how many people you run into,” she says, adding that they frequently see friends from the tech world and their hometown of San Carlos on weekends. “It feels like home.”
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mapThe change in the area’s fortunes has been swift and dramatic. Though the housing market in the Bay Area has been one of the strongest in the country, Lake Tahoe long struggled to recover from the downturn, with homes frequently sitting on the market for many months and selling well below asking price.

Despite the recent boom, prices still have yet to recover to their predownturn heights. Ms. Lowe says pricing generally dropped about 35% from the peak and is coming back slowly.

Martis Camp, a golf and ski community in Truckee that began construction in 2006, has sold 52 lots and homes since the start of January, says Brian Hull, director of sales, up from 27 at this point last year. Prices for lots range from the mid-$600,000s to $2 million and 108 homes have been completed so far. Mr. Hull says the influx of younger families from the tech industry has resulted in a number of contemporary-style mountain homes with glass-filled architecture.

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Larry Ellison Lists Lake Tahoe Compound for $28.5 Million

April 2, 2013

By Sarah Tilton, WSJ.com, March 28, 2013, 10:13 AM

wsj22Oracle billionaire Larry Ellison has listed his 2.62-acre compound on the east shore of Lake Tahoe for $28.5 million.

The property, located in Glenbrook, Nev., was originally meant to be Mr. Ellison’s primary home at Tahoe. But he had the chance to build an estate on the north shore of the lake—it is scheduled to be finished this year—so he is selling the Glenbrook compound, says Jennie Fairchild of Chase International Real Estate, who has the listing. Mr. Ellison has created a 7.6 acre compound with approximately 420 feet of lake frontage at the north shore’s Incline Village, according to public records.

The Glenbrook property includes a 9,242-square foot main house with six bedrooms, eight full baths, and one half bath; Mr. Ellison spent three years remodeling it ‘from the studs up,” according to Ms. Fairchild. There is a sound-proof screening room, a gym, a billiard room, a library and a sauna. The master bedroom wing has two dressing rooms and two baths, each with a handcrafted wooden ofuro, a Japanese soaking tub.

In addition to the main house there is a 1,326-square-foot, two bedroom, three bath guesthouse and another 2,934-square-foot lakefront home with five bedrooms, three full baths and two half baths.

The property sits on 230 feet of lake frontage with a private white-sand beach, two piers, a floating dock, two buoys and a rock breakwater. A 426-square-foot lakeside cabana has a sun deck and a built-in barbecue on the roof. Nearby, a hot tub also looks out over the lake.

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The Nation’s Most Avid Trophy-Home Buyer?

October 22, 2011

How the software billionaire has taken serial property buying to new extremes.

By SARAH TILTON And JULIET CHUNG, OCTOBER 21, 2011
The Wall Street Journal

wsj03One of the nation’s most voracious consumers of trophy real estate is back on the hunt.

Since the mid-1990s, software billionaire Larry Ellison has accumulated hundreds of millions of dollars worth of top-shelf properties around the world. The portfolio of Oracle Corp.’s co-founder includes five adjacent lots in Malibu, Calif.; a Newport, R.I., mansion formerly owned by the Astor family; a historic garden property in Kyoto and an estate in Rancho Mirage, Calif., with a private, 19-hole golf course.

The list of serial buyers of trophy properties, while thinning in recent years, includes Paul Allen along with Roman Abramovich and other Russian oligarchs. Mr. Ellison has a distinctive buying pattern: When he finds an area he likes, he takes a flood-the-zone approach. He often buys several adjacent properties to combine into a single sprawling compound. At the same time, he acquires other noncontiguous properties nearby, increasing his overall holdings in a desirable area.

Mr. Ellison has been applying this approach to a new location: Lake Tahoe, the resort area straddling the California-Nevada border. Records show Mr. Ellison has spent $102 million in the last several years buying property, both on and off the market, to assemble three different parcels fronting the 191-square-mile lake. On one of them, purchased over three years for a total of $58 million, Mr. Ellison is constructing a compound with more than 18,000 square feet of living space as well as a pond with an island, waterfalls and a tennis court with a pavilion, according to plans submitted to Washoe County, Nev.

Mr. Ellison declined to comment. An examination of public records and interviews shows that the billionaire sportsman acquires properties in the same determined way he goes about his other business, whether it’s his hostile acquisition of rival PeopleSoft in 2005 or his successful bid to win the America’s Cup sailing competition last year, an effort on which he reportedly spent $100 million.

The third-richest American, with a net worth of $33 billion, according to Forbes, he was close to fellow tech-company founder Steve Jobs. Mr. Ellison spoke at Mr. Jobs’s memorial service. He has two grown children, Megan and David, both in the movie business, and is recently divorced from his most recent wife, romance novelist Melanie Craft.

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Photo Illustration by Ryan Etter; Zuma Press (Ellison); Getty Images (Kyoto)

Real-estate observers say Mr. Ellison is known for getting what he wants, pursuing properties he’s interested in regardless of whether or not they are on the market. “Larry’s philosophy has always been, ‘Buy the best, without compromise,’ ” says Kurt Rappaport, co-founder of the Westside Estate Agency, who represented Mr. Ellison in several of the Malibu deals. Mr. Rappaport declines to address specific deals but says that Mr. Ellison views prime real estate as a scarce commodity that can’t easily be replicated.

Mr. Ellison sometimes sends an associate to scout out a property before he visits, according to people who have been involved in his real-estate transactions. Mr. Ellison can be quick to act, sometimes making a decision after a single walk-through. “He was very much, ‘I want it, here’s the check, OK, move,’ ” says Christine Mitchell, whose husband sold Mr. Ellison a 1.6-acre lot on the eastern shore of Lake Tahoe for $11.7 million in 2006.

Mr. Ellison’s other holdings include two properties in Woodside, Calif., a wealthy Silicon Valley community. One, a 23-acre estate modeled on a 16th-century Japanese emperor’s residence, was designed and built over nine years and completed in 2004, according to San Mateo County. In 2011, the county assessed it at $70.4 million. The other was purchased for $23 million in 2005 and is now for sale, asking $19 million.

In Malibu, according to records and city officials, Mr. Ellison owns a hotel and two restaurants, the five adjacent lots on Carbon Beach that cost a reported $65 million and at least two other homes. In Rancho Mirage, near Palm Springs, Calif., he bought a 249-acre estate earlier this year for $49 million.

Kenny Blum for The Wall Street Journal $15 Million: The cost to assemble this 2.1 acre parcel with a sandy beach near Snug Harbor, Lake Tahoe.

Kenny Blum for The Wall Street Journal
$15 Million: The cost to assemble this 2.1 acre parcel with a sandy beach near Snug Harbor, Lake Tahoe.

In Kyoto, Japan, he owns a garden property with a home, pavilion and gardens fed by the freshwater Lake Biwa, according to a person familiar with the deal. With an asking price of about $86 million, it was purchased in the last several years after a representative of Mr. Ellison’s learned of the property while attending an art auction.

In San Francisco’s tony Pacific Heights neighborhood, he owns a five-bedroom, four-level home, purchased in 1998 for $3.8 million. Last June, Mr. Ellison sued his neighbors alleging that trees on their property were obstructing his views of San Francisco Bay and harming his property values; the suit was settled out of court in May.

In Newport, Mr. Ellison owns an Italianate-style mansion previously owned by the Astor family and purchased in January 2010 for $10.5 million. Mr. Ellison said earlier this year in a deposition related to his San Francisco tree lawsuit that he had bought a Newport mansion sight-unseen and planned to turn it into a museum.

Lake Tahoe, with its pristine waters and world-class skiing, has long been a seductive draw for Bay Area residents. Incline Village, the town on the Nevada side of the lake where Mr. Ellison has made a number of his buys, bears the nickname “Income Village” for its wealthy residents and its reputation as a tax haven (Nevada has no personal income tax). For years Michael Milken, the philanthropist and former junk-bond king, put on an annual fireworks display on July Fourth from a barge near his Incline Village home. Now local residents and businesses donate to pay for a show, says Jim Smith of Red, White & Tahoe Blue, the local nonprofit that puts on the festivities.

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