Tuesday, September 25, 2012

Five Real Estate Follies, Now Reaching Their Inevitable End - Curbed

Monday, September 24, 2012, by Rob Bear Photos: Lakebutlermansion.com

Five years ago, David Siegel and his wife Jackie were living the high life, as the billionaire real estate mogul continued to rake it in with a successful time-share firm. The couple were planning their dream home, a 90,000-square-foot mega-mansion outside of Orlando, when the financial crisis hit, crippling Siegel's business and eventually spawning the story at the center of the much-lauded documentary The Queen of Versailles. The couple, who were already living in a 26,000-square-foot mansion nearby and attended to by a staff of 19, spent many, many millions on the custom palace, but, so far, have had no luck unloading the mansion, the price of which has been chopped down to $90M complete, or a bargain $65M in its current condition. Yes, someone might come along and scoop up the shell, but given the less-than-desirable location, the condition, and the massive cost of completing a now-gauche, infamous white elephant, it seems unlikely the Siegels will ever recover their investment. Instead, they're still trying to complete the place and move in, years behind schedule. Such tales of excess and failure are not uncommon, and, even as the economy regains its footing, some ultra-rich folks are engaging in similar flights of fancy, with the potential for similar financial consequences.

? Back in 2004, University of Phoenix billionaire Peter Sperling bought this partially-complete limestone mansion on a section of San Francisco's Broadway known, fittingly, as Billionaire's Row. He spent $32M on the property itself, a French limestone shell with more than 21,000 square feet under the roof, then began completing the place, before quitting in 2006 and listing it for a whopping $65M. That would have been some shrewd investing, had it sold. Instead, it's still on the market and has seen its price chopped all the way down to $38.5M. Yes, there's still a modest profit to be had here, but the carrying costs and unknown expense of his renovations make this a folly nonetheless.

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