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