The unicorn CEO’s dilemma: Buy a ritzy home or keep slumming it?

Airbnb's Brian Chesky owns a $3.5M house in the Bay, while Adam Neumann paid nearly $30M for three homes

New York /
Nov.November 16, 2017 11:15 AM

From left: Adam Neumann, Ben Silbermann and Evan Spiegel

Airbnb may be worth more than $31 billion, but CEO Brian Chesky still lives in a $3.5 million home — a relatively modest abode for the Bay Area. WeWork’s Adam Neumann, however, has shelled out more than $25 million for a house in Greenwich Village townhouse, a farm in Westchester and a home in the Hamptons.

With “unicorns” — tech companies valued at over $1 billion — under scrutiny over sky-high valuations, tech executives are falling into two camps when it comes to their own home purchases: playing it safe or spending lavishly.

Given the volatility of tech stocks, some execs could face a reckoning, the Wall Street Journal reported.

Adam Neumann’s Greenwich Village home is undergoing a multi-year renovation

Blue Apron CEO Matthew Salzberg, for example, paid $8.7 million for an apartment at 10 Madison Square West in 2016. But earlier this month, Blue Apron stock hit a low of $3.07, down from its IPO price of $10 per share. Meanwhile, Snap’s Evan Spiegel bought a $12 million mansion in Los Angeles once owned by the actor Harrison Ford in 2016. Today, Snap’s shares are trading at $12.46 per share, down 27 percent from its IPO debut.

Then there’s WeWork, whose $20 billion valuation is considered inflated by some critics. Neumann owns a $10.5 million townhouse in Greenwich Village, plus a 60-acre farm in Westchester that he paid $15 million for last year. In 2012, he and his wife purchased a house in the Hamptons for $1.7 million. (Side note: With his townhouse under construction for the past few years, Neumann has rented a 4,207-square-foot condo at 18 Gramercy Park. A similar unit is currently on the market asking $46,500 a month.)

Although some tech execs got financing for their home loans, its not easy to do when their wealth is tied to company stock.

“A lender looks at that and says, ‘We have no idea what the value of those shares are, so we’ll value them at zero,’” Chuck Green, owner of Capital Funding, a mortgage brokerage, told the Journal.

The dot-com bus can also be a cautionary tale. Tech executive Eric Greenberg, founder of the internet consultancy Scient, paid $16.1 million for a three-acre estate in Ross, Calif., more than a decade ago. By 2002, the company filed for bankruptcy and Greenberg recently listed the home for $18.8 million. [WSJ]E.B. Solomont


Related Articles

arrow_forward_ios
Sculpture artist Robert Hooke’s Sag Harbor home lists for $10M
Sculpture artist Robert Hooke’s Sag Harbor home lists for $10M
Sculpture artist Robert Hooke’s Sag Harbor home lists for $10M
 An industry report says that mortgage lenders and investors are ill-prepared for the growing challenge of climate risk. (iStock)
Mortgage market stakeholders are unprepared for growing climate change threats
Mortgage market stakeholders are unprepared for growing climate change threats
Macklowe Properties CEO Harry Macklowe, CIM Group Co-Founder Richard Ressler and 432 Park Avenue (Getty, CIM)
432 Park Avenue residents sue developers for $250M
432 Park Avenue residents sue developers for $250M
US household real estate values jump by record $1.2T
US household real estate values jump by record $1.2T
US household real estate values jump by record $1.2T
David Bitton, CMO and co-founder of DoorLoop and Ori Tamuz, CEO and co-founder of DoorLoop (Bitton, DoorLoop, Getty)
Startup DoorLoop to take on goliaths in rental management software
Startup DoorLoop to take on goliaths in rental management software
Richard Grossman
Brown Harris Stevens’ NYC president Richard Grossman steps down
Brown Harris Stevens’ NYC president Richard Grossman steps down
The six bedroom Sagaponack house (Out East)
Sagaponack mansion lists for $32M in East End’s supply-constrained market
Sagaponack mansion lists for $32M in East End’s supply-constrained market
Home sales dipped in August after two months of increases
Home sales dipped in August after two months of increases
Home sales dipped in August after two months of increases
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...