For the women abused by Jeffrey Epstein, the $110 million listing of his homes in New York and Palm Beach represents a chance for reparations. The late financier’s estate has promised the proceeds will flow into a compensation fund for his many victims and creditors.
For residential brokers, it’s the opportunity of a lifetime — one that some have been pursuing since Epstein died in jail last summer. Listing agents Adam Modlin in New York and Kerry Warwick in Palm Beach garnered kudos from their peers when news broke of the estate’s decision.
Epstein’s prestigious Upper East Side mansion was the subject of much competition, as agents jockeyed to land the listing, priced at $88 million. Douglas Elliman’s Richard Steinberg was a finalist, according to sources. Steinberg declined to comment.
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In Palm Beach, Christian Angle, a top broker and owner of Christian Angle Real Estate, is said to have been in the hunt. But Warwick, managing broker of Corcoran’s Palm Beach office, ended up securing the nearly $22 million listing of the waterfront compound at 358 El Brillo Way, less than two miles from the president’s “Winter White House,” Mar-a-Lago. Angle did not respond to a request for comment.
Warwick and Modlin declined to comment.
With the race over, the industry is considering both properties’ asking prices with a mixture of approval and skepticism. Critics have called the figures aggressive and unrealistic.
There’s also the matter of Epstein’s legacy. These are not your run-of-the-mill luxury homes: Epstein was accused of sexually abusing dozens of young girls in both locations, luring them for naked massage sessions and sometimes paying them hundreds of dollars in cash, according to prosecutors. The sordid backstories may be obstacles that certain buyers can’t get past.
Some brokers argue the Upper East Side mansion’s image can be rehabilitated with new owners and a renovation. The Palm Beach house, however, will likely be razed.
Florida
Corcoran’s Warwick told the Wall Street Journal that she believes “past ownership of the property will bear no relationship to its future.” But the Palm Beach estate will probably trade only for its land value, sources said.
“It’s an aggressive price for land but I believe that at that price, [they are] trying to attract someone who would move into the house and I’m not sure that’s going to be easy to find,” said Jim McCann of Premier Estate Properties.
Still, in Palm Beach, a tight-knight community where brokers say the number of wealthy buyers has outpaced supply, the late sex offender’s waterfront mansion is expected to find a buyer relatively soon. One broker said Warwick had already lined up three or four showings for Friday.
El Brillo Way, tucked away on the west side of the island, is “a prime street in the Estates section of Palm Beach,” McCann said. The mansion offers views of Tarpon Island and Everglades Island and is within walking distance of Worth Avenue, Douglas Elliman agent Chris Leavitt said.
As the inventory of homes gets snapped up, it puts upward pressure on the price of teardowns and lots. Buyers in the market include end-users, investors and homebuilders.
“People look around and they can’t find what they like, the next step is if we can find a piece of land and hopefully build it,” McCann said. “In the last couple of months, many developers have sold through their inventory.”
Of the 154 single-family homes listed for sale at the end of the second quarter, 19 were on or across from the water and asking a combined $482 million, or an average of about $25 million, according to a report from Premier Estate Properties.
During the pandemic, two homes sold for at least $70 million, including the former Kennedy family’s Palm Beach estate. Rocker Jon Bon Jovi recently sold a new mansion he built, reaping under $20 million on the same day he closed on a larger one for $43 million.
Sales of single-family homes in the second quarter totaled 55, according to the report, which cites MLS and off-market deals. That represented a 22 percent year-over-year increase. Another 51 properties were under contract, up 122 percent from the same period last year. Agents describe the market as “nuts” and “pandemonium” with wealthy buyers often flying in on their private jets for the day to tour houses and make offers.
But Epstein carries a stigma that is several orders of magnitude more damaging than that of Ponzi schemer Bernie Madoff, who owned 410 North Lake Way. Though brokers expect that the El Brillo house needs a gut-renovation, a teardown is more likely.
Spec home developer Todd Michael Glaser, who viewed the Epstein home by boat before it hit the market, called it “expensive for what it is.” Glaser believes it will sell for closer to $16 million. One broker said the nine-bedroom, 14,000-square-foot compound could trade for $18 million or $19 million.
The 1950s home, designed by Palm Beach architect John Volk, sold to Epstein in 1990 for $2.5 million. “The house is dated,” Glaser said. “It’s definitely going to be knocked down.”
New York
Sentiment is similar for Epstein’s grand townhouse on East 71st Street.
Brokers who have toured the luxurious home called its $88 million ask unrealistic, noting that a buyer will likely shell out even more on a renovation given its dated aesthetic (most of Epstein’s furniture remains in place) and to rid the property of the stain of its former owner. If the mansion gets its initial price, it would break a record set last year by the sale of financier Philip Falcone’s East 67th Street home for $77.1 million.
“It’s definitely aggressive given that the prior trade a year ago, pre-pandemic, was in the $70 million range,” said Douglas Elliman broker Frances Katzen. The U.S. attorney for the Southern District of New York last year pegged the townhouse’s worth at $77 million.
But some brokers say it is in line with the prices fetched by some of the Upper East Side’s famous and historic mansions. At $3,143 per square foot, Arlene Reed of Warburg Realty said, Epstein’s 28,000-square-foot home was “not too bad” compared with other groundbreaking deals.
Falcone sold his 13,300-square-foot home for $5,797 a foot. But that math does not include 2,200 square feet of rear garden and rooftop terrace. Typically, outdoor space is worth one-quarter to one-half as much interior space. Factoring that in would pull Falcone’s price down by as much as $450 per foot. (Listing photos suggest the only outdoor space at the Epstein townhouse is a narrow top-floor terrace.)
Two years ago the historic Wildenstein family mansion at 19 East 64th Street, which is zoned as a commercial townhouse, sold for $90 million, or $4,772 a foot. In a listing for the Epstein mansion posted to StreetEasy, Modlin appealed to commercial buyers, noting the property “could easily present itself as a palatial consulate, embassy, foundation, or a museum to once again house some of the world’s greatest works of art.”
Several brokers interviewed by TRD said they were confident a number of buyers would be interested.
Elliman’s Katzen acknowledged the “stigma” of the 50-foot-wide townhome being known as “the Epstein House,” but said, “Will that perturb someone from what it really is, which is a great space and a great location with great width? Probably not.”
Jason Haber of Warburg Realty said he was talking with two clients — foreign and domestic — who were interested in the property as a residence. “New York is a town of trophy homes,” he said, “and this is one of the bigger if not the biggest trophy out there.”
Douglas Elliman’s Sabrina Saltiel agreed.
“It is one of the most beautiful properties in New York and someone will buy it for that reason,” she said. “I do think there will be people who will not look at it … but ultimately you need one buyer.”
Macy’s heir Herbert Strauss commissioned its construction in 1930 from architect Horace Trumbauer, who made his career drawing up Gilded Age mansions. Trumbauer designed the home to span seven floors, and many of his original features remain, such as 15-foot tall entry doors and limestone imported from France.
The Strauss family later donated the mansion to the Roman Catholic Archdiocese of New York to be used as a hospital. In the 1960s it became a prep school until retail magnate Leslie Wexner acquired the property for $13.2 million and converted it back to residential use.
Market in flux
While New York’s luxury market has been struggling for several years and sank even further when the pandemic hit, townhouses have recently been showing some signs of activity. In the second week of July, four went into contract in Manhattan — a third of all luxury deals in that time, according to a market report from Olshan Realty.
And with social distancing now top of mind, some townhouse specialists have made the case that these properties are more appealing than ever — offering space and privacy without the crowded elevators and communal gyms condo buildings are known for.
“If there’s going to be a winner in the luxury real estate market, no question it’s going to be a house,” Jed Garfield, a townhouse specialist with Leslie J. Garfield, told TRD in May. “You’d need to be a moron to think otherwise.”
Reed said that outlook was even more apt for a “trophy” like the Epstein townhouse.
“It’s the house of horrors in terms of sexual abuse. But the next owner will make it something else,” she said. “I think what people are going to see is an extraordinary property.”
Write to Erin Hudson at ekh@therealdeal.com, Sylvia Varnham O’Regan at so@therealdeal.com and Katherine Kallergis at kk@therealdeal.com