(Bloomberg) -- A $115 million purchase of a duplex high above New York’s Central Park in June ended a nearly two-year drought for the city’s ultra-luxury real estate market.
The closing was ultimately a turning point. Less than a month later, a nearby five-story penthouse went for $135 million.
With more than four months of the year still to go, home sales of $100 million or more are on pace to set a new record in the city. Billionaires globally have seen their wealth boom, generating momentum for major home purchases. The pace of sales is spurring optimism among agents tasked with finding buyers for other top listings around the US.
Nationwide, there have been six deals at $100 million or above this year through the end of July, just three shy of a record set in 2021. Those have stretched from Southern California, where an oceanfront estate notched a record for the state at $210 million, to Aspen, Colorado — where a transaction this year crossed the nine-figure threshold for the first time.
The pace of ultra-luxury deals isn’t expected to let up anytime soon. Over in Malibu, one agent is preparing to put a mansion up for sale in a private listing for $300 million, which would set a record for the most expensive US home sale if it gets an offer at that level. Another agent in the area, Aaron Kirman, said he’s working with a few buyers who are looking for mega-mansions in Los Angeles or Malibu, and also has a pair of nine-figure listings, including a $115 million European-style villa in Bel Air.
“I’ve had more billionaires call me so far this year for $100 million homes than I had in the whole of last year,” said Kirman, who is chief executive officer of Christie’s International Real Estate Southern California. “They want what they want when they want it — and they’re willing to pay for it.”
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While the pool of potential buyers is still small, top-tier billionaires have watched their wealth swell over the past few years. In early January, the median net worth of the world’s 500 richest people was $9.3 billion, according to the Bloomberg Billionaires Index. By August, it was almost $9.9 billion, meaning a $100 million home purchase would account for just about 1% of their wealth.
Now, there are even more homes for them. As the wealth of billionaires boomed, construction started on various projects catering to the richest, and many of those properties are becoming available. Plus, business titans including Jeff Bezos and Ken Griffin are becoming even more strategic about their massive real estate portfolios, finding ways to snap up plots of land in Florida to create even larger estates for their families.
“Clearly there’s demand, which seems to be increasing,” said John Gomes, co-founder of the Eklund Gomes Team at Douglas Elliman Real Estate. “There is definitely an upward trajectory, and we might even double this year what we did last year.”
Bargain-Hunting Billionaires
Sky-high listing prices won’t mean that the property always sell for that much. Both New York sales ultimately went for less than what the sellers initially asked.
The transaction at Central Park Tower closed in June for about $60 million less than the $175 million Extell Development listed it for last year. In July, Vladislav Doronin shelled out $135 million for the very top floors of a project he’d developed, the Aman New York. That figure was lower than the $180 million that a different buyer reportedly agreed to pay for the unit in 2018.
While some billionaires are looking for relative bargains, others have very specific demands and are willing to pay up to get what they want, said Fredrik Eklund, who worked with Gomes and Kent Wu to bring an undisclosed buyer to the Central Park Tower deal.
“They have their eyes on something and they only want that,” Eklund said. “They overpay or not — it doesn’t matter.”
Some of the richest homeowners have been stitching together massive estates through multiple expensive sales. In Florida, Bezos paid $147 million last year in separate transactions for two neighboring properties on Indian Creek island and agreed to buy another for $90 million in April.
Jills Zeder Group founder Jill Hertzberg worked with Griffin to stitch together adjacent parcels on Star Island that cost a combined $194 million. Now, she said, he’s being offered double or even triple what he paid for the assemblage but isn’t going to sell.
“He’s not interested,” she said. “Someone like him had the foresight when no one else was doing it.”
‘Master of the Universe’ Residences
The richest buyers are often interested in new homes, according to Hertzberg. But if they can’t find one that a developer or occupant is willing to sell, some are more open to knocking the buildings down and starting over instead of renovating the old properties, she said.
“It used to be when I first came to Miami Beach, people renovated these old Mediterraneans, the Art Decos,” Hertzberg said. “And then people started coming in with star architects who would say, ‘No, let’s take it down.’”
She expects her $132 million listing of four adjacent homes on La Gorce Island in Biscayne Bay to close in the coming weeks, with one buyer purchasing three and another acquiring the fourth. The larger transaction will fall just short of nine figures.
For buyers looking for newly built properties, there are more options under construction. A penthouse at Miami Beach’s forthcoming Shore Club Private Collection went into contract for more than $120 million in March. If it closes at that price when the building is completed in a few years, it would double the record for a Miami-area condo set by Griffin in 2015.
“The supply is finally coming,” Eklund said. “Every single project that we’re working on, we are doing these master-of-the-universe kind of residences on the top.”
