''We've become a country of have-nots and have-a-lots. Rewards in this economy are going to the rich and leaving the rest behind. And hopefully they're going to want houses like this,'' says real estate mogul Robert Greene, referrring to a waterfront Florida mansion.
Robert Frank
Jeff Greene became a billionaire during the recession by betting that people would default on their mortgages. Now, happily ensconced in a 35,000-square-foot estate in Palm Beach, Fla., Mr. Greene has a more optimistic outlook about real estate, at least when it comes to the very rich.
Standing on his private beach, the 59-year-old real estate tycoon pointed to his new luxury hotel down the shore, called the Tideline Ocean Resort & Spa.
Mr. Greene has purchased two other hotels in West Palm Beach and he is working on approvals to build two 30-story towers downtown that would house a five-star hotel, a conference center and the most expensive condos in town.
''It's paradise here,'' he says, looking out over the crystal blue water as his wife, Mei Sze, and year-old son played nearby. ''And it's just getting wealthier.''
Mr. Greene's ultimate wealth statement, however, is a 25-acre property, the Palazzo di Amore, in Beverly Hills, Calif., that he has been turning into a Hearst Castle of the second Gilded Age.
The 35,000-square-foot main house has 12 bedrooms, 23 bathrooms, two kitchens and sweeping views of Los Angeles. There is a guesthouse, a 24-car garage and an ''an entertainment complex'' with its own bowling alley, rotating dance floor, D.J. booth and laser lights. The complex also has its own vineyard -- a rarity in Beverly Hills -- and a wine cellar that can hold thousands of bottles.
Mr. Greene has put the estate on the market, after seven years of building it. The asking price is $195 million, making it what is believed to be the most expensive public listing in the country.
''When you consider the value of the land and the quality of the construction,'' Mr. Greene said, ''$195 million is really quite reasonable.''
Only a billionaire real estate promoter would call $195 million ''reasonable.'' And while Mr. Greene says he didn't set out to list the most expensive home in the United States, real estate experts say the price is as much a marketing tactic to draw attention as it is a real reflection of value.
''These are vanity numbers, and they are usually very far off from the ultimate sales price,'' says Jonathan Miller, of Miller Samuel, an appraisal firm. ''Jeff is a very smart real estate guy. But there are only a handful of people in the world who can buy this. And will any of them want to?''
Last year, three estates sold in the United States for more than $100 million, including the most expensive residence ever sold in the country -- an 18-acre property in East Hampton sold to Barry Rosenstein, a hedge fund manager, for about $147 million. More than a half-dozen homes are currently listed for more than $100 million, including a beachfront property called Le Palais Royal being built near Boca Raton, Fla., and offered for $139 million. At least three penthouses in Manhattan carry price tags above $100 million.
''We've become a country of have-nots and have-a-lots,'' Mr. Greene said in his living room filled with French antiques and fine art. ''More and more of the rewards for this economy are going to the rich and leaving the rest behind. So I think you're going to have more and more very wealthy people. And hopefully they're going to want houses like this.''
A self-proclaimed progressive and former Democratic Senate candidate in Florida, Mr. Greene is troubled by the new hollowed-out economics of housing, but also quick to profit from it. He has pledged half of his wealth to charity and says the rich should pay higher taxes, as long as education and government programs are also overhauled to create more opportunities for the middle class.
Yet he made his biggest fortune betting on the housing crash, using complex financial instruments to target subprime mortgages. When many of those mortgage holders defaulted, Mr. Greene made more than $800 million. He is now worth more than $3 billion.
Mr. Greene explains that he didn't cause any defaults -- he simply bet they would happen. And his trades were aimed mainly at offsetting the possible decline in value of the hundreds of apartment units and other homes in California that made up most of his wealth. He didn't want a repeat of the early 1990s, when he lost most of his real estate fortune in the savings-and-loan crisis.
The housing crisis was good for bargain-hunting, too. He picked up the Beverly Hills property -- 25 acres and a half-built house -- out of receivership for $35 million in 2007, as California real estate was sliding. A longtime bachelor famed for his all-night parties and celebrity pals, Mr. Greene got married on the property in 2007, with Mike Tyson as the best man. He and his wife planned to live there when it was done.
Mr. Greene hired one of the star developers in Los Angeles, Mohamed Hadid, to finish the estate. Shortly after they started, however, the couple decided to move to Florida for the more family-friendly lifestyle (and, perhaps, more friendly taxes). Instead of taking a few years, the Palazzo has taken more than seven years and over $25 million to finish. The trees and plants alone cost more than $5 million.
''It just went on and on, since I'm a perfectionist,'' Mr. Greene says. The main house is dripping with Old World luxury, with carved-wood moldings, chandeliers, gold faucets and marble. The floors are made from Bavarian walnut that was hand-scraped by dozens of woodworkers to make them look antique. The Turkish spa is attached to a ''Moroccan room'' that was carved and painted by craftsmen who work for the king of Morocco.
''The king had to give them permission to make this,'' Mr. Hadid said during a recent tour. ''He had to sign the papers.''
Mr. Greene says the most likely buyer could be a Russian oligarch, a Saudi sheikh or a Chinese billionaire who wants security at a time of global and financial unrest.
New tech wealth is also fueling sales around Los Angeles. A 23,000-square-foot ultramodern house in the Trousdale Estates area of Beverly Hills sold last month for $70 million to Markus Persson, the Swedish creator of the Minecraft video game. The builder of the home, Bruce Makowsky, is now working on another house expected to be priced at over $100 million, real estate agents say.
Mr. Greene likes to distinguish his palatial Palazzo di Amore from the Modernist-style homes popping up in Beverly Hills by saying it ''is meant to be there for hundreds of years, just like any of the other great homes of the world.''
And homes, after all, are the ultimate investment, he says. Mr. Greene's four-acre compound in Palm Beach, which he bought for $24 million in 2009, is now worth well over $75 million, brokers say. He has no plans to sell. But he points out that even the most extravagant fixtures in the home -- from the Picabia and Picassos on the wall to the 19th-century French chandeliers, can be resold for a possible profit at auction.
''I'm very careful with how I spend my money,'' he says. ''When I spend money on houses, I'm not spending. I'm investing.''
