St. Regis penthouse on sale for $70 million
Thursday, August 28, 2008
Real estate mogul Victor MacFarlane has placed his huge St. Regis penthouse on the sales block for $70 million, a figure that would obliterate the previous record price tag for a San Francisco residence.
If there's a buyer, that is.
The asking price for the completed condo, the interior of which is still under construction, works out to $3,500 for each of the roughly 20,000 square feet. MacFarlane bought the property, originally three unfinished units on the top two floors, for about $30 million in late 2005. At the time, it was the highest total ever paid for a condo property - if you consider it a single purchase - and nearly the largest amount ever spent on a San Francisco home.
The property at the St. Regis Residences on Third Street has been built out just to the point where a new owner can select finishes and decor. There are no fixtures, furniture or appliances, mostly just Sheetrock, exposed steel and concrete. Even so, the configuration, size, heights and views are striking.
The floor-to-ceiling glass curtain walls and four terraces, including one that is more than 2,000 square feet, offer a 360-degree panorama of San Francisco and the surrounding bay and region. The brushed aluminium frame windows are 22 feet high in the immense corner living room. The foyer will include a winding staircase and two-story waterfall.
There are six bedrooms, seven baths, four powder rooms, four fireplaces, two offices, a wine storage room, a gym with a sauna and steam room and a 13-seat cinema. The infrastructure is in place - including miles of wiring and piping - for top-of-the-line audio, video, lighting, security, shading and climate control systems.
"It's certainly the most extraordinary apartment outside of New York, and probably one of the two or three biggest homes in San Francisco," said Patrick Barber, managing broker with Sotheby's International Realty, who is representing the property. "No one will be able to buy a 20,000-square-foot residence in San Francisco again."
The question remains, however, whether anyone will be willing to pay that much for one now. The high end of the real estate market has continued to far outperform the broader market through the downturn, but at this astronomical end of the market, the pool of potential buyers shrinks considerably.
"It might be a little on the high side," said Rick Goodwin, publisher of Unique Homes magazine. He said the bar for top-end luxury townhomes and condos in major urban markets is around $50 million, with the highest prices reserved for properties in resort markets such as Palm Beach and the Hamptons. The priciest known single-family residence for sale in the nation today is a $125 million property in Los Angeles neighborhood of Bel Air, he said.
Locally, a handful of homes have been priced around or above $50 million, but none has sold for near that amount. The 11,500-square-foot home at 2920 Broadway in Pacific Heights went on the market for $45 million in 2003, but ultimately closed for $20 million to $30 million, industry sources say.
The highest known price in San Francisco was the $32 million paid in late 2002 for 2845 Broadway, then an uncompleted villa. Coincidentally, it's for sale again, now at $65 million, the city's priciest official listing according Realtor.com. It's been on the market for at least the better part of a year.
Three properties over $10 million have closed this year, with a median price of $14.5 million, and sales prices in well-heeled neighborhoods and for downtown luxury high-rises keep rising.
Part of the reason is that rich buyers aren't nearly as affected by subprime loans, the inability to secure financing or often the need to take out a mortgage at all. Another is the huge creation of wealth happening throughout the world and especially in the region, said Steven Mavromihalis, a sales associate with Pacific Union GMAC Real Estate.
"There has never been a greater accumulation of wealth in a shorter period of time or smaller geographic area than in the Bay Area during the past two decades," he said. "Combine that with the facts that San Francisco is 7 by 7 (miles) and there are only a limited number of great houses, and you've got the phenomenon we're talking about."
The Ohio-born MacFarlane is the chief executive officer of MacFarlane Partners, a San Francisco real estate investment firm with $11 billion under management. He has been managing money for the California Public Employees Retirement System since the early 1990s.
The company's Bay Area projects include the Uptown apartment development in Oakland, the Bay Street Emeryville retail center and the Meridian Luxury Apartments in San Bruno. MacFarlane's highest profile buildings have been elsewhere, including the Time Warner Center in New York City. He's also the co-owner of the D.C. United soccer team in the nation's capital.
Despite his strong track record, MacFarlane has not been immune to the recent woes of the real estate industry.
A residential land deal involving thousands of undeveloped acres north of Los Angeles has dropped significantly in value since it was completed in 2007 and received a default notice on $1 billion in debt. MacFarlane Partners recently laid off 15 employees.
The decision to sell the San Francisco penthouse was based on lifestyle, not business factors, said Julie Chase, MacFarlane's publicist.
"The reality is, he's traveling around so much, having all these properties isn't making any sense," she said.
MacFarlane primarily resides in Hillsborough.
Orlando Diaz-Arcuy and Building Momentum Inc. designed the interior. If the ultimate buyer decides to take it as is, instead of completing their plans, a lower price would be negotiated, Sotheby's Barber said.