Imagine Spending $95 Million On A House And Then Tearing It Down

By on October 5, 2016 in ArticlesBillionaire News

In 2008, Donald Trump sold a $95 million Palm Beach estate to a Russian oligarch. It started as a the kind of deal the Donald is known for – snapping up a property at a rock bottom price. That was the case with the Maison de L'Amitie. The enormous 81,738 square foot beachfront estate has 467 feet of beach facing the Atlantic Ocean on its 6.2 acres. It once belonged to millionaire Abraham Gosman. Gosman owned health care properties across the U.S. A downturn in the stock market led to his bankruptcy and the mansion went on the market.

Trump grabbed the property at a Chapter 7 Bankruptcy auction for $41 million in 2004. He sold the property for $95 million four years later. Officially, Trump sold the mansion to County Road Property LLC, which is a front for Russian billionaire Dmitry Rybolovlev.

Dmitry Rybolovlev is Monaco based Russian fertilizer billionaire and real estate magnate, with a $9.8 billion net worth. He also has a majority stake in the football club AS Monaco. Rybolovlev is probably best known to Celebrity Net Worth readers as the man who nearly had the most expensive divorce in history.

Given the history of Rybolovlev's divorce case, it is easy to see why he'd have such a valuable asset so far from his home base. His divorce was called the divorce of the century and went on for seven years. In the end, his wife was awarded $4.5 billion. Rybolovlev appealed that ruling and ended up paying his ex-wife Elena $604 million. A bargain, right?

However, the oligarch never moved into the oceanfront mansion and now backhoes and dump trucks have started to demolish the once stately estate. This marks a new moment in Palm Beach. That's a nearly $100 million home!! Can whatever is built on the land ever fetch that price?

According to city planning documents, Rybolovlev is planning to split the property into three parcels that will then be sold. Each subdivided parcel will have to sell for $35-40 million each in order for Rybolovlev to make a profit. The largest lot is at the southern end of the property and will be 2.35 acres with the potential for a 51,000 square foot, 10 bedroom, 12 bathroom home. The other two lots will be just under two acres and able to accommodate a 42,000 square foot house.

However, this is Palm Beach, who cares about the house—the real draw (and money maker) is ocean frontage. The largest parcel will have 173 linear feet of beach and ocean access. The other two will have about 150. In order to fetch the expected asking price, each lot will have to sell for more than $215,000 per linear feet of ocean frontage. The current average price per linear foot of beach is $100,000 to $120,000 in Palm Beach. However, hedge fund manager Ken Griffin recently spent more than $120 million to buy and combine four lots for an average of more than $200,000.

The Rybolovlev property is considered to be one of the best on the island.

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