“Kids!! Don’t touch that!! Do NOT sit there!! Ugh… get the bleach… we’ve gotta clean this place!”
California’s most infamous mansion could soon be home to a new family. And the price tag is just north of ridiculous. But the terms of the sale – while not entirely unique – are slightly foreign to many.
The backdrop of some of the most legendary and wildest parties ever thrown in Los Angeles — THE PLAYBOY MANSION — is going for sale.
Located in the Holmby Hills and build in 1927, this 5.3 acre estate will be listed sometime within the next month. The word is that Playboy Enterprises is looking to get somewhere north of $200 million dollars.
Yes… that’s NINE zeros.
A pretty high price tag for a property where… and I quote: “NO POTENTIAL BUYER MAY ENTER THE MASTER BEDROOM, UNDER ANY CIRCUMSTANCES UNTIL THE TRANSACTION IS FINALIZED AND THEY ARE IN FULL POSSESSION OF THE PROPERTY.”
Weird, right? Well… it gets weirder because “full possession of the property” in this case is NOT when the average buyer normally thinks it is. But I’ll explain that at the end.
For now I’d like to revel and reminisce (meaning BRAG) over the fact that I’ve had the fortune to attend events at the property – back in my music industry days. And speaking from experience, the Playboy Mansion was in some level of disrepair from its glory days. And parking for those amazing parties… forget about it. Most attendees are directed to park at an off-site location, to be bused in. Not very “high brow” for some, but a necessary inconvenience to be seen at the last debaucherously carefree intersection of “Old Hollywood” and present-day Hollywood.
The neighbors are VERY STRICT about who parks where in the Holmby Hills. And a long stretch of trial and error led the Playboy “party patrol” to iron out logistics long ago to avoid pitchforks and torches from storming the grotto. Because – yes – there are SOME neighbors who are none-to-thrilled with the attention or antics that have been wrought upon their community by the steady stream of party-goers to the home of Americas most popular creepy old guy.
So – back to the price – $200 million bucks. But what’s it worth?
In 1971 Heff (we all know who that is) purchased the home for $1.1 million. It was one of TWO Playboy Mansions that he owned. The other was in Chicago and he split his time between the two up until 1974, when he moved to California for good.
In the same year, and after 18 years of success, Playboy became a publicly traded company.
In 2011 a lawsuit was filed when Heff was in the process of buying out minority shareholders. As the majority shareholder he wanted to, once again, privatize the company. And in doing so – let’s just say he did some creative mathematics in order to diminish his payout. The center of the issue was his evaluation of the Playboy Mansion. Mr. Heffner claimed the value was about $1.2 Million. But an appraisal of the property confirmed that – at the time – it was worth $54 Million (or 45 times more than he was asserting). In the end – Heff secured his legendary company in 2011 by agreeing to pay a premium figure of $207 Million to secure sole ownership of his company.
Now, just 5 years later, he seems to have changed his mind on the value. Pretty convenient, no?
This attempt at such a high asking price only proves my long running point that there is no shortage of people in the world who dare to dream that they’re home is a unique and special snowflake, worthy of hijacking that one special buyer… who is stupid enough to foot the bill. Not to say that buyers who pay too much are stupid… oh wait… that’s EXACTLY what I’m saying. But what I’m also saying is that some sellers have this insane notion that THEIR HOME is worth kazillions because… well… BECAUSE!!
But in this particular case – and I hate to say this – the seller may just have a bit of a point. After all… there are some very wealthy people in the world with a great deal of money, and who often buy things for prestige – rather than for the actual market value of what said item might sell for. And while there are many homes in L.A., there is only ONE Playboy Mansion in the world – etched in to the subconsciousness of men and women who may have (at one time in their lives) flipped through the pages to see the perfection of the female form — albeit frequently enhanced by the best surgeons that money can buy… along with photo shop. In fact there is an entire generation of men out there who would never know what the term “air-brushing” was, without Playboy.
Even so… nostalgia and stupidity still have their limits. And those who have that kind of money tend not to get overly nostalgic or stupid when it comes to handing over $200 million dollars.
As it sits today… the Playboy Mansion is (by neighborhood standards) a “tear-down”. This means that no one investing in the property for the purposes of living there would keep the home as it stands. The actual structure is not as valuable as the 5.3 acres of land on which it sits. A comparable property recently sold for $60 million, but due to the famous nature of the Playboy Mansion it could conceivably sell for somewhere between $80 million and $90 million dollars.
For those who are wondering if maybe the sale of this iconic landmark has anything to do with the fact that in 2015 the announcement was made that Playboy would no longer feature nude models… the answer is no, not really. The removal of nudes was due to the shrinking profits in the print realm, an issue they first openly recognized sometime before 2005. The abundance of competition online pretty much required playboy to evolve or die.
And evolve they did.
According to Wikipedia, Playboy now derives over 40% of its revenues from its media division, and about half of the revenue comes from the licensing of consumer products. Between their rabbit-head logo design and other images, trademarks, and artwork that appear on a wide range of consumer products — including apparel, accessories, footwear, lingerie, jewelry, fragrances and home fashions — Playboy annually generates more than $1 billion in global retail sales, in more than 150 countries and territories. They’ve even got a firm footing in the spirits industry along with the trendy new vapor business.
So why sell? Clearly Playboy doesn’t need the money.
And by Playboy – I mean founder (and aforementioned “creepy old guy”) Hugh Marston Hefner.
Heff is no spring chicken. April 2016 will ring in his 90th birthday celebration – an event that will be celebrated at the mansion, EVEN IF HE SELLS IT TOMORROW.
Because that brings us to the unique terms that he’s put on the table, should a buyer be willing to make him an offer he can’t refuse. Heff will NOT be moving out. He will be carried out.
That’s because his intention is to procure a LIFE ESTATE.
In simple terms… you buy the mansion, you give him the money (whether it be $200 million or some other figure that the two of you agree on), and Heff gets to live in the comfort of his long time home until the day he dies.
This is not an uncommon clause in a contract for people in his position or of his age. But it is something that the average home buyer would view as a huge negative or determent. And such a term should actually DECREASE a potential offer, not increase it.
In my view the life estate clause could push the final sales figure down a bit, much closer towards the neighborhood comparable standard.
No matter how it turns out, one thing remains clear… when the new owners take possession of the property – after 45 years (and counting) it will truly be the end of an era.
So whether you’re seeking a slice of Hollywood history – or looking for a very nice neighborhood to build your dream home on 5.3 acres – CALL ME if you are anywhere near looking to buy – or sell a home in 2016 – anywhere in the nation.
Trust me… I’m an AWESOME REALTOR!!
For more information… or for details on any specific property you might be consider buying (whether money is no object, or every penny counts)… please reach me anytime to get REAL ANSWERS to your REAL ESTATE questions… 7 days per week. My team and I serve residential buyers and sellers all over New England… with affiliates around the world! Are you a FSBO SELLER? Call me for my complete guide to SELLING YOUR HOME ON YOUR OWN!
Thanks for visiting my website. Rhode Island is my home, and I’m always here to help.