![Bear’s Club property](https://www.propertyforum.com/wp-content/uploads/2017/08/golf.jpg)
The performance of properties in the higher echelons of the US celebrity real estate market has been mixed to say the least. We regularly see celebrities selling properties for a significant profit while others are forced to knock tens of millions of dollars off their initial asking price. Indeed some have gone so far as to list their properties for sale but also offer them for short-term monthly rental for hundreds of thousands of dollars. So, why is the $11 million sale of a Bear’s Club property grabbing the headlines?
Bear’s Club
The Bear’s Club is a community situated in Jupiter, Florida and was founded by golfer Jack Nicklaus and his wife Barbara. Not only does it offer an array of residential properties but as you might expect there is a pristine 18-hole golf course and a 40,000 ft.² clubhouse. This is not your stereotypical golf club, more a community where celebrity golfers and real estate investors can come together.
Recent sale
Recently a property at 130 Bear’s Club Drive changed hands for $11 million. The property offers 17,012 ft.² of living space and the sale price equates to $646 per square foot. What is surprising is the fact that the home was originally acquired back in 2008 at a cost of $11.05 million (in the middle of the financial crisis) meaning the owner has taken a slight paper loss. When you consider the carrying cost of an $11 million investment, and any improvements made since 2008, the actual loss is probably significantly more.
The documentation accompanying the sale shows that the property has seven bedrooms, 10 bathrooms and was custom-built back in 2003. There is a home theatre, recording studio, games room, six car garage, stylish wooden floors, three fireplaces and a 4120 ft.² guest home. And there is more, six covered patios, outdoor kitchen, swimming pool, spa and a tennis court. All for $11 million!
Celebrity residence
We can take for granted that the Bear’s Club is an exclusive community as the likes of Michael Jordan, Serena Williams, Venus Williams and golfers Luke Donald, Ernie Els and Michelle Wie have all been connected with the community at some point. It probably helps that Jack Nicklaus is one of the best-known names in golf and a man well-known for his integrity as well as his business prowess.
It is unclear whether any of the above celebrities acquired their properties in the midst of the 2007/8 financial crisis. The fact that the property at 130 Bear’s Club Drive is only now, nine years later, clawing back its original value is perhaps a warning for all celebrity real estate investors. We also know that Gary Nicklaus, the son of Jack Nicklaus, originally tried to sell his own Bear’s Club property last year for $12.5 million but ended up going to auction.
Timing is of the essence
Sometimes investors automatically assume that those properties towards the higher echelons of the market, the multimillion dollar properties, retain their value better than most. The assumption is that multimillionaires will be relatively untouched by property market crashes because of the unique communities in which they live. However, this is a warning that all markets are impacted and even those with deep pockets can feel the pinch and the cold wind of financial distress.