How do brokers get listings from the Department of Justice?
Brokers speculate on who will sell Jeffrey Epstein’s properties and how they’ll do it. One thing's likely: “You’d probably have to de-Epstein it.”
UPDATED: August 23, 3:24 p.m. In early July, after an unsealed criminal indictment revealed that New York prosecutors would move to seize Jeffrey Epstein’s Upper East Side mansion, broker Jason Haber, of Warburg Realty, put in a phone call to the Southern District.
“I said if there is going to be a process for the disposition of real property, I’d like to be considered for that,” he said.
In the wake of the financier’s suicide, there has been intense speculation about what will happen to his luxury properties in New York, Palm Beach, New Mexico, Paris and the Virgin Islands. The criminal case against him has been dismissed — a defendant’s death means a pending case can’t proceed — but the government could still mount a civil forfeiture case against any one of his US properties, in which case they could be seized and sold, and proceeds would go to victims.
If Epstein’s Upper East Side mansion was forfeited, Haber is one of many New York brokers who would be interested in selling it. But how would they get such a listing?
A representative from the United States Marshals Service — an agency within the Department of Justice — said the Marshals’ asset forfeiture division contracted with a third party, Colliers International, to oversee the sale of forfeited properties.
It’s Colliers, rather than the government, that has the responsibility to select brokers.
Dan Feldman is the director of the firm’s government services department. He said that when a property is forfeited, his team will do an assessment, looking at location, price, demand and other factors. From there, they conduct interviews with a select pool of brokers.
“We want someone who has made a name for themselves selling that type of product,” he said. “We get a lot of people coming up to us and saying, ‘I’d love to list a $10 million property for you,’ and we’ll say, ‘Great, what have you done?’ And then they’ll send their experience and they’ve sold $200,000 houses.”
Colliers secured its contract in 2017 and commenced work on it in early 2018. (Before Colliers won the contract, the sale of forfeited properties was outsourced to multiple different companies.) The commercial brokerage oversees the sales of an estimated 600 to 700 forfeited properties per year on behalf of the government. Brokers’ names are included in each listing.
According to Colliers, Feldman’s team is “the only comprehensive services platform focused on government real estate on a national basis.” In addition to the Marshals, they also have a contract with the Federal Deposit Insurance Corporation to market and sell properties.
While high-profile homes get the most attention, Feldman said the average sales price for forfeited properties was under $500,000. He said the stigma of forfeiture didn’t hurt their asking price, and most went for “at or above” what the previous owner paid.
Commissions were taken from the sales proceeds to cover both the buy and sell sides of the transactions, and fees varied by product type. (Feldman said they were calculated based on a formula laid out in its initial proposal to the Marshals.)
All the forfeited properties currently on the market are showcased on a nondescript website called Real Look, in addition to StreetEasy and other websites. A quick search of the New York properties on Real Look brings up a listing for the Soho apartment that once belonged to Paul Manafort, President Trump’s former campaign chair, now serving a seven-year prison sentence for a raft of criminal offences. The 2,061-square-foot condo was one of five properties forfeited as part of a plea deal with the Department of Justice in 2018.
Manafort’s other seized properties, worth an estimated $21.7 million in total, include a one-bedroom condo in the Trump Tower, listed for $3.6 million, and a 5,564-square-foot Hamptons estate that features hundreds of red flowers planted in the shape of an M.
The agent associated with Manafort’s Trump Tower and Soho listings, Kenneth Laino of the Manhattan Network, declined to comment for this article, saying he had referred The Real Deal’s questions to his employer. He would not clarify who his employer was.
Asked about this, Feldman said that brokers who work on forfeited properties are made to sign confidentiality agreements.
Jason Haber has never worked on a forfeited listing, but Epstein’s mansion was not the first inquiry he’d made about a property connected to crime. In 2009, he pitched himself to market Bernie Madoff’s penthouse apartment, which had been seized after the investment advisor’s multi-billion-dollar Ponzi scheme was discovered in late 2008.
After the call, Haber said he was invited to view the penthouse.
“The apartment was covered with US Marshals,” he said. “In the bathroom, Madoff’s electric razor was still out. In his closet, there must have been 15 white polo shirts: the exact same polo shirts, just stacked. It was kind of surreal because it was as he left it.”
Haber didn’t get the listing, which instead went to Sotheby’s International Realty brokers Anne Corey and Serena Boardman. (It sold for $14.5 million in 2014.) In the years since, he has been contacted multiple times about other forfeited properties. “I guess my name is on file,” he said.
Feldman said Colliers received a lot of calls from brokers about forfeited properties, particularly after they’d been in the news. He declined to comment on whether the firm had received any calls about Epstein’s portfolio.
Inside the Epstein home
According to The New York Post, Epstein signed a will and testament just two days before his death. In it, he left his nearly $600 million fortune to a trust, though details about its beneficiaries are not known. Epstein’s only potential heir was his brother, Mark Epstein, but the will reportedly added that Mark only had a claim to his brother’s extensive holdings if Jeffrey hadn’t left behind the document.
Lawyers for Epstein’s accusers have vowed to pursue civil claims against his estate, and two lawsuits have already been filed. In one, Jennifer Araoz accuses Epstein of sexually abusing her from the age of 14, and her account offers a rare glimpse inside the Upper East Side townhouse where much of the abuse is alleged to have taken place.
Araoz says Epstein’s “massage room” had a ceiling “painted to look like a blue sky with clouds and angels to give the appearance that you were in heaven.” His master bedroom, meanwhile, featured “a large jacuzzi and prosthetic breasts on the wall in the bathroom that he could look at or play with while in the bathtub.”
Jed Garfield, managing partner of Leslie J. Garfield, said he had shown the house as many as eight times in recent years, and while the interior was over the top, he didn’t find it creepy.
“People want to fit the interior into the story of depravity,” he said. “But if Epstein didn’t live there, you wouldn’t say, ‘Wow this is some pedophile’s house.’”
In the wake of Epstein’s death, Garfield said he planned to contact Darren Indyke, a longtime employee of Epstein and one of the executors of his will, to ask about the mansion.
“I would say, ‘I have no idea what the estate’s planning on doing but I’m very familiar with that house and, prior to Epstein’s death, I was showing it on a semi-regular basis. Would you be interested in hiring me to sell it?’” he said.
Haber said the seven-story townhouse would certainly attract interested buyers, given its size and location, but brokers could have a difficult time overcoming the property’s past.
“You’d probably have to de-Epstein it,” he said, adding that any future sale was likely still a long way off. “Take out as much stuff as you can.”
But Garfield thought the property’s former owner wouldn’t make a difference to buyers.
“I don’t think people care,” he said. “It may even add to the attraction of it.”
“It becomes a house with a personality — not just another house.”
Correction: This article has been amended to clarify the status of Mark Epstein as potential heir and beneficiary to the Epstein estate.