June 10th, 2005
For What It’s Worth
Sally Maloney of Greenwich Fine Properties has just listed the Stillman Rockefeller estate on Indian Spring Road, and it’s pretty neat. The house was built in 1929 and if it was ever updated I didn’t notice, but here’s your chance. Fourteen thousand square feet, seventeen bedrooms (including all the servants’ rooms), the place is practically a museum of Rockefeller family memorabilia. The oar used by Rockefeller to win the gold medal in the 1924 Olympics is mounted next to other winning blades, and there are photographs, paintings and other depictions of this family’s life spanning all of the last century and longer. The house itself seems to have been built by a high-rise construction company, with concrete between each floor and a steel endo-structure that should hold the place up for another five hundred years.
Which is what I hope is what happens. While the house is sorely in need of a massive renovation (a builder who is familiar with such projects estimated a total cost of $5,000,000) it is well worth the effort. All rooms but the servants’ quarters are beautifully scaled, with twelve-foot ceilings and large, but not daunting dimensions. The bedrooms all have fireplaces and three have sleeping porches to make up for the lack of air conditioning (and who needed that when you had summer places scattered about the country?). Interesting (to me, at least) the family bedrooms all connect to each other: in an era that saw the Lindberg kidnappings, the Rockefellers would make certain all the children were in bed and then set a security alarm to seal off the sleeping quarters. I suppose that the recent kidnapping of Eddie Lampert demonstrates that the world hasn’t gotten any safer. There are eleven acres (from an original fifty) of lawns and a series of secret gardens, a pool and adjoining bathhouse. It’s priced at $26,000,000, which gave me pause but at some price (high teens?) this place will make a magnificent home base for the next tycoon of this era. Of course if that’s you and you really have that kind of money at your disposal you’re probably also one of those people who doesn’t like to wait, so why not jump on it now?
Marking to Market
Julie Church’s listing at 47 Alpine Road was originally listed (in April, 2002) with another agent at $8,750,000. As construction progressed its price was increased, first to $9,250,000 and then to $9,750,000. With no sale, the builder dropped its price back to $8,750,000 again and then in a fit of pique increased it to $11,000,000. Even this strategy failed, surprisingly and 2004 saw, besides Julie as the new agent, a series of price reductions: $9,300,000; $8,500,000 and finally, $7,995,000. It sold last week for $7,250,000, a little more than three years after it was first offered for sale. That’s a pretty tortuous course just to determine the market price for a building project.
Selling It By The Pound
Or in this case, by the square foot. Using 47 Alpine as a model, let’s break down its costs and profits. Sales price was $7,250,000, of which approximately $5,000,000 reimbursed hard costs (land, $900,000 in 1999, construction costs of, say, $400 sq.ft. X 9,000, or $3,600,000, commissions of $362,500, state and local conveyance taxes, $82,625). Our builder is left with about $2,250,000 to pay for site development, carrying costs, architectural fees and profit. But did he earn much profit? I hope so – the point of this exercise is not to wish ill on a builder but rather to demonstrate the perils confronting builders of big houses. At $11,000,000, the builder would have received $1,200 for each of his house’s 9,000 square feet; when he sold it last week he got $800. Out of curiosity, I researched the selling price, per square foot, of twenty-six houses built in 2003 and later with a minimum size of 8,500 square feet. The average was $609, with only three houses fetching more than $800 (and none, excluding a house in Conyer’s Farm – different animal) reaching $900. For the sake of argument, if you pay $2,000,000 for land and incur $400 per square feet in construction costs, you’ll have to sell your project for $622 per foot just to get back where you started and, after adding site development costs etc. – figure a third more-you need $809 to stay in business. The averages say that you won’t get it. All of which, if I were a big box builder, would make me nervous.
I notice that those little yellow plastic caution signs parents place in their driveways now read “Alert, Children!” I used to threaten my own kids that I was going to put up the then-current sign, “Slow Children at Play” whenever they brought home a bad report card but I guess that no longer happens in Greenwich.