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San Francisco Mansion, $55 Million, Offers Aging Kitchen, Pipes

By Dan Levy

Enlarge Image
The staircase leading up to the mansion

Aug. 2 (Bloomberg) -- The Italian palazzo-style home in San Francisco's Pacific Heights neighborhood has a living-room view of the Golden Gate Bridge and Alcatraz Island, and billionaires Gordon Getty and Larry Ellison for neighbors.

What the house doesn't offer is a security system, a renovated kitchen, or updated fixtures in the 7 1/2 bathrooms. Both the heating and plumbing systems are original to the 1927 structure.

That isn't stopping the seller from listing the seven- bedroom house for $55 million -- more than double the highest price ever paid for a San Francisco residence.

``You don't have the fancy granite, marble and luxury finishes you'd expect in a $55 million house,'' said broker Joseph Moore of Alain Pinel Realtors. ``It's a fixer.''

Moore, who isn't one of the listing agents, estimated that the hillside house at 2901 Broadway needs ``a few million in renovations'' to be a luxury property.

Getty, heir to an oil fortune, and Ellison, chief executive officer of Oracle Corp., live on the next block. The house has been toured by potential buyers from the U.S., Italy and the Middle East. It was featured in luxury estate publications, said Constance Heldman of R/E Source Realty in Tiburon, California, one of three agents handling the listing.

``It's a landmark in San Francisco -- everybody has a curiosity about it,'' she said. ``It brings out people who aren't thinking about leaving their homes, unless it's for this house.''

Golden Gate Pedigree

The house was designed by architect Henry Clay Smith with the help of Joseph Strauss, an engineer on the Golden Gate Bridge, according to marketing materials. The oversized lot has a tennis court, and 78 brick and stone steps lead to the house's arched front door.

A steel structure cantilevered under the tennis court ``ties into the house and keeps it from falling into the street,'' said Gladyne Mitchell, the owner, who inherited the residence from her father, a San Francisco real estate developer.

Older homes in desirable cities can find buyers even without refurbishing, said Hall Willkie, president of the Brown Harris Stevens brokerage in New York. An unrenovated townhouse on 82nd Street near Fifth Avenue on Manhattan's Upper East Side sold for $40 million. A nearby limestone mansion on 75th Street that hadn't been used as a single-family home in almost half a century sold for $53.5 million, he said.

Luxury Sales

Sales of U.S. homes costing more than $10 million increased in the past year, said Kay Coughlin, president and chief executive officer of Christie's Great Estates in Santa Fe, New Mexico.

In San Francisco, 14 houses were sold for more than $5 million in the year ending in June, just one fewer than a year earlier. That suggests luxury homes there ``haven't taken any kind of hit'' amid the U.S. housing slowdown, said Andrew LePage of DataQuick Information Systems in La Jolla, California.

A newly constructed home near the Broadway property sold this year for $15.8 million. Another sold for $14 million, which was $1.5 million more than the asking price, said Moore of Alain Pinel.

``People are being aggressive and spending what it takes to get prime real estate,'' said San Francisco broker David Gowan at TRI Coldwell Banker.

On New York's Long Island, investor Ron Baron paid a U.S. record $103 million for a 40-acre (16-hectare) East Hampton spread. A 6 1/2-acre estate once owned by publishing magnate William Randolph Hearst is on the market in Beverly Hills, California, for $165 million.

Record Price

The record sale in San Francisco is $25.5 million for a home of almost 16,000 square feet (1,500 square meters), according to the city assessor. The property, sold in October 2005 by J. Crew Group Inc. Chief Executive Officer Mickey Drexler, was completely renovated and has a Roman-style pool in the basement.

That comparison makes some brokers skeptical about the Broadway home's asking price.

``It's out of the range of reality for the condition it's in,'' said broker Anne Riley, also of Alain Pinel. ``It needs to be brought up to code.''

San Francisco arts patron Dede Wilsey, a real estate investor and president of the board of directors of the Fine Arts Museums of San Francisco, agreed.

``It's insane,'' she said. ``There is an extraordinary amount of money around, and that's unprecedented.''

High asking prices may be cut if a house sits too long without selling. Tennis star Andre Agassi sold his Marin County, California, estate last year for $20 million after listing it four years ago at $24.5 million. Wrestler Hulk Hogan's Bellaire, Florida, home, listed last year for $25 million, has been reduced to $17.9 million.

``It's just a matter of supply and demand,'' Willkie said. ``With a great house, anything can happen.''

To contact the reporter on this story: Dan Levy in San Francisco at dlevy13@bloomberg.net

Last Updated: August 2, 2007 03:11 EDT