From the Hamptons to Hawaii to the Balearic Islands, masters of industry tend to congregate together, even when they’re on vacation
BY BILL CARY
For people who live in thriving, noisy, big cities across the globe, quiet, secluded second homes are the ultimate in dreamy escapes.
And for big-money financial titans and billionaire entrepreneurs in major metropolises, second—and sometimes third and fourth—homes are simply an expected necessity for them and their families. Affordability may not even be an issue.
“These Silicon Valley guys and hedge fund managers, they call me and say, ‘I don’t have a budget—find me a home,’” said Harold Clarke of Luxury Big Island by Harold Clarke, a premier luxury real estate brokerage on the Big Island in Hawaii.
And they want second homes that are move-in ready.
“These hedge fund boys have very demanding jobs,” said Alasdair Pritchard, a partner with Knight Frank in London. “They want no headaches,” he said. “They’re not going to deal with a builder, they’re not going to deal with an architect, they don’t want to deal with renovating it.”
Susan Breitenbach, one of the top brokers in the Hamptons year after year, agreed. So many of her clients who are big players on Wall Street only want to look at new construction, she said.
“These are a lot of particular people,” said Ms. Breitenbach, an associate broker with the Corcoran Group. “They have beautiful apartments in the city and they don’t want some shabby, older place in the Hamptons. They want it all.”
Getting to their grand and stylish second homes easily and quickly is hugely important, too. “For the last two, three, four years, these high-net -worth people are happy to pay a higher premium for that ease of transport,” Mr. Pritchard said. “It has to be within a two- to three-hour flight out of London. Getting in and out of an airport is key.”
“It all comes down to the functionality of the property and the ease of getting there,” he said.
They also enjoy being near their fellow business people, Mr. Clarke said. “Mr. Power Broker is to the left—and to the right. Yes, they are on vacation, but it becomes an incredible opportunity to network for them.”
To get a sense of exactly where these power brokers and captains of industry are choosing to buy their vacation homes, we talked to real estate experts in a half-dozen cities around the world.
From Silicon Valley to Hawaii
In recent years, Mr. Clarke has seen a steady stream of big-money Silicon Valley entrepreneurs and tech executives coming to Hawaii to look around for a second home. Specifically, they have fallen in love with the super-luxurious and resort-filled Kona-Kohala Coast of the Big Island.
“I’m always returning to the Big Island to find them something,” he said. “Nothing compares to the service here.”
“These are very, very high-end resorts,” where these big money makers make their homes, Mr. Clarke said. “It might be a $50 million house or a $2 million condo.”
The Big Island is twice as big as the others, “with a lot of nature and volcanoes and a lot of space,” Mr. Clarke said. Other popular spots include Wailea in Maui and Princeville in Kauai.
Hawaii is wild and exotic, yet safe and known. “Hawaii is still the U.S. and this island is completely natural—it’s quite untouched,” he said. Plus, further sweetening the deal is the fact that it’s a five-hour flight from northern California.
“They look for security and comfort and ocean views and, obviously, space,” Mr. Clarke said.
Kona International Airport is “literally five minutes away” from these resorts on the Kona-Kohala Coast, he said. “They land in their private plane and they’re five to 10 minutes from their gated resort.”
As far as age ranges, “a lot are between 50 and 70,” Mr. Clarke said. But now, in the last three to five years, I’m seeing a considerable increase in the crowd that’s between 27 and 37.”
Some of these captains of industry are frequent visitors, spending as much as half their time in Hawaii, he said. “Some are here one or two weeks a year. This may be their third, fourth or fifth home.”
“We’re starting to see very, very large price tags,” Mr. Clarke said, mentioning a couple of lots—two-acre parcels of land—that sold recently for between $20 million and $25 million. “And that’s just for the dirt.”
From Wall Street to the Hamptons
For a number of decades, the Hamptons on eastern Long Island has been the go-to spot for high rollers on Wall Street.
“If you live in Manhattan and want a weekend place, there are very few places out there that have what the Hamptons have,” Ms. Breitenbach said. “In the Hamptons, you can get anything you need—it’s the same as the city,” with the same hot and hip restaurants, parties, helicopter commutes and yoga teachers…. in additions to oceans and farm stands.
The drive is anywhere from 90 minutes to three-and-a-half hours from Manhattan (or more, depending on traffic), and a helicopter ride takes 45 minutes or so.
And beaches in the Hamptons are hard to beat, she said. “The Jersey Shore or upstate New York doesn’t really compare. They may have tried Nantucket or the (Martha’s) Vineyard, but it’s too far.”
In recent years, she has been seeing younger faces in the Wall Street crowd. “It’s a lot of young families now, who are tending to come out year-round,” Ms. Breitenbach said. “They’ll go apple- or pumpkin-picking in the fall; they’re joining golf clubs.”
“They can do all of the great parties and they can lay low and just be with their family,” she said.
The rental market on the East End is also still healthy, though it is “now more last-minute and less full-season,” Ms. Breitenbach said. “This year and last year, people are waiting a little longer to rent and maybe only taking one month. Quite a lot of people are willing to take less time–maybe take one month here and also maybe traveling to Europe.”
Typical rents for the season for these big players are $1.2 million, or $400,000 to $500,000 for a single month. As far as what people are paying to buy, “I have $50 million properties and I have $2 million ones,” she said. “They all want to get good value and they don’t want to overpay.”
This four bedroom, recently renovated beach house in the Hampton’s Amagansett is currently on the market for $7.4 million.
“They want special views and to be on the ocean or near the ocean,” Ms. Breitenbach said.
Integrated indoor-outdoor spaces with outdoor kitchens and fire pits are very popular now “because they are indoors all the time in the city,” she said.
One of her recent renters just asked if the owner of the house could please install an outdoor TV at the pool.
From City of London to Europe’s Coast
For finance titans in London in search of the perfect second home, the south of France has been the “top spot for the last two to three years,” Mr. Pritchard said. Ideally, they want to be within a fairly short drive of the Nice airport.
“You leave London on your jet, you’re sitting for two or three hours and 30 minutes later you’re sitting on your balcony sipping a glass of rose,” he said. “Ideally, they want the place to be within 20 or 30 minutes of Nice.”
Houses that cost between €5 million and €10 million “are the sweet spots,” Mr. Pritchard said. “I wish I could say it was €20 to €30 million, and some of them can afford €20 [million] to €30 [million], but they’re not spending that kind of money now. They’re a little nervous” about the British currency and what Brexit will mean to the value of their money, he said.
London finance wizards are also checking out the Spanish Island of Ibiza, which is better priced than the French Mediterranean, he said.
“For €5 million in Cannes, you have neighbors on either side of you and distant views of the sea,” Mr. Pritchard said. “In Ibiza, that gets you uninterrupted views of the sea.”
While it’s not the only Balearic island that’s popular with Londoners, it does usually reign supreme, he said. “Mallorca, like Ibiza, offers better value for the money when compared to the south of France by and large, but it doesn’t hold quite the same lifestyle and curb appeal as Ibiza,” he said.
There is also interest in large Italian cities such as Florence and Rome as well as in Liguria, “especially the stretch of coastline around Portofino,” he said. But it’s not always easy. “Italy can be very bureaucratic, at times,” Mr. Pritchard said.
In both France and Italy, he said that he has seen an “increase in people wanting to have a little fun with their assets—maybe they’ll get a villa with five hectares of vineyards.”
“For pure lifestyle, Tuscany is on the up with buyers wanting peace and tranquility, with their own vineyards and olive groves,” he said.
As an added bonus, most of these places are less than two hours’ flight from London… even when flying commercial.
From Washington D.C. to Chesapeake Bay Towns
When high-powered lobbyists and political bigwigs in Washington, D.C., enter the second-home market, they often turn to Maryland’s Eastern Shore, said Michael Rankin, principal and managing partner of TTR Sotheby’s International Realty.
Popular communities there include St. Michaels, Easton and Oxford, he said. “You’ve got boating and sailing communities, old historic towns–it’s quite nice.”
The Eastern Shore has a wide variety of price points, Mr. Rankin said. “You’ve got big historic estates or a fishing cottage in town.”
What makes the area so appealing is that it’s less than a two-hour drive from Washington, he said. “You can be totally removed and you don’t have to get on a plane, you don’t have to go through security.”
The Massachusetts islands of Martha’s Vineyard and Nantucket are also popular with Washingtonians, he said.
“You think of Nantucket as only for New York or Boston, but it’s Washingtonians as well,” Mr. Rankin said. “When I go to Nantucket for the summer, or part of the summer, I see more Washingtonians than you’d imagine. It’s familiar, it’s easy.”
(The flight is about 75 minutes from the D.C. area.)
“There is another set that goes out west–Jackson (Wyoming) or Vail (Colorado),” he added. “Some executives take their families for a month and head out west.”
Because of Washington’s awful heat and swampy humidity, second homes for summer are becoming increasingly popular.
“The city empties out, certainly for August, but more and more July, too,” Mr. Rankin said. “By July and August, people are pretty much gone.”
From Hong Kong To … Right Outside Hong Kong
While some of Hong Kong’s wealthiest financiers are buying second homes across the border in mainland China, many of them are staying fairly close to home, according to David Ji, director and head of research and consultancy for Greater China at Knight Frank.
“Hong Kong is a small city,” Mr. Ji said. “Some people tend to buy second homes near their first homes.”
If their first home is right on the Hong Kong Island, their second home might be in Kowloon, an area just north of the island, he said. “Some may go a bit further to the New Territories,” a region of wetlands, parks and mountains in Hong Kong that also encompasses outlying islands. The New Territories have a lower density and are “relatively affordable, with fresh air and close to the countryside and beaches.”
Rather than building large private houses, these second-home buyers are mainly looking at existing luxury apartments, he said, with standard amenities like a modern gym, spa, indoor and outdoor swimming pools, Jacuzzi, and meeting and event facilities. They are also looking for “plenty of historic and modern attractions they can visit.”
Hong Kong is small, he said, with extensive roads and rails, so getting to their second homes can be relatively quick, he said. “Everywhere is reachable within one or two hours by public or private transportation.”
Because of the very high residential prices in Hong Kong and the opportunity to find larger units and more affordable and spacious properties, some wealthy financiers these days are also heading “across the border in Mainland China, say in major cities like Shenzhen and Guangzhou, even Beijing and Shanghai,” Mr. Ji said.
There are direct flight links from Hong Kong to many of the Mainland cities.
Along with second homes for them and their families and a possible place to retire, these high-net-worth-individuals may also be looking for diversified investment opportunities on the mainland, he said.
Originally appeared here in Mansion Global.