A $US190 million Greenwich, US offering: Purchase or Pass?

On this week’s Purchase or Pass, Elizabeth Tilley is joined by John Edwards CEO of Residex and Charles Tarbey chairman of Century 21.

Since the global financial crisis, a number of property investors have been looking to the US for property. Tonight we check out America’s most expensive property to see whether it’s worth our investment dollars. It’s up for sale at a mere US $190 million.

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It’s a 12-bedroom property set on 17 hectares and is the largest parcel of waterfront land to come on the market in Greenwich in more than 50 years. It includes a private beach, a grassed tennis court, 22-metre swimming pool, gatehouse, greenhouse and two nearby islands. It’s the first time the mansion has been publicly listed since it was bought by the Lauder Greenway family – co-founders of US Steel – in 1904. The neo-French Renaissance manor has many original features including speaking tubes, which date back to the days before electricity. With the main kitchen located in the basement, it is clear that the 12-bedroom house will need updating.

The UK’s Daily Mail has described the property as “drab” and dubbed it the “US$190 million fixer upper”.

Elizabeth Tilley: So John, Charles, what’s your verdict on this one?

Charles Tarbey: I couldn’t afford it. Look, it’s a wonderful looking home, if you look at it, at the end of the day $190 million, you can’t price something like that. It’s really about people wanting to buy it. If somebody really wants to buy it and they’ve got the money to throw around they’re going to do it. I don’t know how you would get a valuation on it, put it that way.

John Edwards: I don’t believe that these types of houses are priceable.

Charles Tarbey: I understand there’s a mortgage on it as well. So if there’s a mortgage on it, realistically is it going to stand on its own? There’s a US $120 million mortgage, so US $120 million against what somebody says is worth $190 million. There would have to be a charge upon a charge upon another charge on a company over a business over some other structure for a bank to lend that much money on a $190 million property, something doesn’t sit right there at all.

John Edwards: I would love to own it, but I know I could never afford it.

Charles Tarbey: I know this might sound a little bit harsh, but I’ve always thought people who live in really big homes hate their families.

Elizabeth Tilley: You’d never get to see them; there would be so many rooms.

Charles Tarbey: That’s exactly what I mean; people who live in really big homes don’t really like their family that much.

Elizabeth Tilley: Two islands though, that wouldn’t be bad? Two islands?

Charles Tarbey: It’s a burden. I would see that as a massive burden, having something like that, I really would. You would have to employ so many people to just look after the home, you would have no privacy, it would be a horrible lifestyle to live. Let’s stick to the one-bedroom, bachelor pad in Ultimo, John, I think we’ll leave it at that.

John Edwards: I Pass.

Elizabeth Tilley So a pass from you John, and a pass from you Charles?

John Edwards: A pass from me Elizabeth, yes.