INVESTORS IN THE MlLLENNl-um Mansion, a magnificent marriage of technology and opulence in an area of prime residential real estate, took a bath when it sold at a lavish auction in December.
The spec house at 5505 DeLoache Ave. originally went on the market about a year ago for $5.3 million. On Dec. 9, the investors who built it, eager to close, opted to auction it off through National Auction Group, Inc., where the auctioneer ambitiously started bidding at $5 million. The “world-famous” mansion cost an estimated $4 million to build. Dr Pepper Bottling Co. chairman and CEO Jim Turner and his wife, Julie, bought it for a little more than $3 million.
According to Doris Jacobs of Allie Beth Allman Real Estate, who helped list and sell the house, a potential buyer offered the full asking price last February, but his “’financial situation didn’t work out.” And there was an all-cash offer for more than the original selling price, but the investors turned it down. Jacobs believes the investors thought they could make more money by selling at an absolute auction, one with no minimum bid.
Asked to explain the low price, Jacobs says, “It’s typical of an auction. People think bargain.” The house sold for about $140 per square foot, quite a bargain indeed, considering that comparable rates in the area can be around S300 per square foot.
Appraiser D.W. Skelton thinks the investors had “high expectations” to build a spec house in such a price range. Not since the ’80s has such confidence been placed in the residential real estate market. During that boom, however, banks-not private investors- were holding the money bag for spec homes.
Skelton notes that land in that area sells for any where between $500.000 to $800.000 per acre, and the Millennium Mansion is only about an acre and a half. “If people spend that much money, they want a bigger lot,” he says.