Anyone who has ever purchased a diamond engagement ring of a certain size in America knows you also immediately secure insurance to protect your “investment” in the piece.
What surprises many first-time buyers is this Replacement Estimate is often no less than two times the sale amount; rising exponentially depending on quality and price.
To wit, around thirty years ago this author purchased a flawless two-carat solitaire for $30,000 and promptly was provided a Replacement Estimate of $75,000 to ease his conscience on the ride home.
For the experienced buyer…you go recline, have a drink and try to remain calm.
Above the mind of the neophyte in such a situation bands of perspiration form as he fervently considers how he can ditch the bauble and thereby multiply his money, which of course is idiotic – insurance companies are not in business to be taken advantage of by any random Raffles.
Such documentation of doubling valuation is simply standard practice in the concern of gems as they assume you will not lose (or have stolen) your item for many years to come.
With this baseline established, the metric expands by way of any assets whether art, precious metals or other – the crown jewel of most portfolios being Real Estate.
This brings us to the perpetually embattled Donald Trump (from whom the previous election was totally NOT stolen…*cough *cough…).
Among his many trials, perhaps the most serious is the current case in New York which rests on whether the President repeatedly exaggerated the value of his properties in order to obtain favorable conditions on loans.
The height of this practice being lofty assessments for his Palm Beach domicile.
Meaning “Sea to Lake” the mansion is one of the few remaining estates on Palm Beach which spans the entire island…in practice meaning occupants are privileged with both sunrise (seaside) and sunset (lakeside).
The hovel was constructed during the 1920s by Marion Sims Wyeth (who also was architect of the Florida Governor’s Mansion) for Marjorie Merriweather Post (owner of General Foods and one of several claimants to being the “wealthiest woman of America”) in the Mediterranean-style.
We need not delve into the technicalities; but suffice it to say the structure has 114 rooms and covers 20 acres of land in total.
Upon her 1973 demise Merriweather Post willed the property to the United States government which, as is typical of American foresight, rejected the estate following ten years of maintenance.
It was then purchased by one Donald J. Trump for the price of $7 million in 1985 - the best money he ever spent.
For those unfamiliar with Palm Beach, Florida…it is different. Very different than anyplace else in America.
While there may be a few Zip Codes with a higher net worth there is nowhere else with such a congregation of characters.
Thereon are many hedge-fund managers, several artists of all varieties, trust fund beneficiaries and of course the ubiquitous Old Money.
It is not uncommon to find someone listing a used Rolls Royce automobile in the Classifieds of The Palm Beach Daily News (known locally as “the shiny sheet”).
If there is anything bad about Palm Beach it would be (in this order):
As regards the last of these, it is less status (and I would have no qualms saying so if it were) but that some sorts who come to Palm Beach do so for nuptials and are not so much “New Money” as “Few Manners”. They apparently reserve spaces because of the expense and thereby feel they are entitled.
Lesson for our new-found friends: IF ANYONE IS ON PALM BEACH THEY ARE SOMEONE.
Moreover, it’s virtually impossible to consistently say who is whom. Examples? I’ve got a (multi)-million:
1. At a certain watering hole (favored by a former colleague) about ten years ago was a very attractive young woman working as a bartender…who was daughter of a Billionaire.
2. The dowagers (and there have been more than one during these decades) who roam Worth Avenue in shoddy clothing with paper grocery bags…filled with tens of thousands in cash to go shopping.
3. Devotees of the Palm Beach Goodwill who would line up prior opening…for “deals” they could afford thousands of times over but did it for a thrill. (One said once it was like an Easter Egg Hunt.)
And there are others – That early-morning diner at Green’s Pharmacy (which sadly twenty years ago removed all the autographed photos of a lifetime of visitors) could just as easily be a day-labor landscaper or best-selling author renowned the world over.
To round it out is a tale of “Old Palm Beach”.
It comes from back when actor George Hamilton was a habitué of the city and specifically to the soirees of the stunningly beautiful heiress C. Z. Guest.
Regarding the tanned thespian it was remarked by one confidante…”We all knew he didn’t have money, but in those days as long as you had manners and looked good you were welcome here.”
If anything, that is the true Palm Beach aesthetic even now – Courtesy and Chic rises above Cash and Couture.
Bringing us back to Real Estate, in a time of inflation the Palm Beach scene is hyper-inflation.
Twenty years ago a small cottage would set you back $600,000. Ten years ago the exact same place would be $1.6 million. Today you would have to pay nearly $3 million…if you could find a seller.
As for something ocean-front? There are several of the more residential and less palatial piles of rubble along the Northern end of the island. They often have frontage divided by the road with cabana and pool on the sea-side. Architecture $300,000 anywhere else is minimum $8 million there.
Lastly, and tying together the mantra – Everyone is Someone in Palm Beach – years ago this author was on a private yacht passing a vacant lot side-adjacent the ocean (near the now-former Rush Limbaugh estate…bought in 1998 for $3.9 million and recently sold for $155 million).
Your correspondent happened to know the value of the small parcel yet an East Coast banker, believing himself quite the pampered pup, gestured askance, “I bet I could get it for $900,000!”
To which the Captain laughed, “Try around $6 million.”
The contemporary price might be well above $20 million.
Anyone who thinks they have money should reconsider before conspicuous displays of ostentation.
So what is Mar-a-Lago actually worth in cold hard shekels?
Can anyone really say?
Given the stratospheric nature of Palm Beach valuations this commentator would submit you could essentially set any sum on the property which it would in time (and sooner than you believe) attain as amount.
Trump said it was worth $517 million to obtain loans. A Manhattan District Attorney prosecuting him says it was worth $27 million.
At time of this article there is currently listed a lake-view lot (less desirable island side) consisting of 0.8 acres for the low, low price of only…$59 million.
Taking but this (admittedly anecdotal) comparison the 20-acre Mar-a-Lago land would be worth around $1.2 Billion…NOT including the mansion, the fact it faces the sea or its historical associations.
It should also be noted this is the lowest tagged parcel. There is likewise currently listed a corner lot barely over 2 acres for $150 million as well as another roughly 2-acre unimproved lot for $200 million.
Median price of a home in the United States as a whole? $430,000.
Median price of a vacant 2 acres lot in America as a whole? $35,000.
Palm Beach is different.
Guy Somerset writes from somewhere in America
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