When real estate developer Richard Kurtz put his 30,000-square-foot, 12-bedroom, 19-bath home on the market for $68 million in 2010, it was the most expensive property in New Jersey. Seven years later, the house, which sits on a little more than six acres in Alpine, a suburb about eight miles from New York City, remains both unsold and at the top of the market. The only change is its price: It will soon be relisted for a mere $48 million.
“I’m not giving it away,” Kurtz said in a phone interview. “There’s a lot of house, with a lot of value, and a very smart buyer will recognize that.” He’s in no rush to sell it, he said. “I could sit with it for another four or five years,” he continued. “But I’d prefer not to.”
If it remains in his possession for an additional four or five years—an unenviable situation, given that he's never lived in it and said it costs him about $400,000 a year to maintain—it will probably be for reasons similar to why it's been sitting on the market for years in the first place.
The Owner's Take
The simplest explanation is its price. Only a finite number of people both have that kind of money and are willing to spend it on a new-construction home in suburban New Jersey. Kurtz himself is first to admit this. “You’re dealing with a limited audience,” he said. “I spoke to somebody who deals with athletes, and even if they make $15 million a year, they can’t afford this house.”
Kurtz also attributes the home’s stagnation to the fact that he listed, delisted, and then relisted the house multiple times.
The saga began in 2006, when he purchased the estate from Henry Clay Frick II, grandson of robber baron Henry Clay Frick, for $58 million. (Part of the purchase agreement stipulated that Frick, who had Alzheimers disease, could live on the property until he died, which happened about a year later.) The property encompassed more than 60 acres, and Kurtz set about turning it into parcels, choosing a six-acre piece of property to build his and his wife’s dream home. (Forty of the acres remain undeveloped.)
Designed by Morristown, N.J., architect James Paragano, the house has an indoor basketball court, an elevator, an 11-car garage, a ballroom, a movie theater, a pool, and a tennis court. All told, including the cost of land, Kurtz said, the house cost about $38 million to build, a little more than $1,260 per square foot.
Even before construction was finished, though, the couple listed it for sale. “We were going to move into it, and then there were marital problems,” Kurtz said. “She’s from Beverly Hills and decided that Alpine wasn’t for her, and it took her a few years to decide that.” (The couple has since divorced.)
Kurtz said that the home’s on-again, off-again listing has hurt its prospects and that, despite the initial mountain of press coverage, no real buyers came knocking. “There was some interest, but not a lot of interest. I’d say it was spotty,” he said. “We never fully marketed the property.”
There was another factor, Kurtz speculated: New Jersey, itself. “There’s been some overall negativity with the state of New Jersey,” he said. “Just so many politicians that have gone to jail, and the Jersey Shore and Snooki and all that nonsense.” Chris Christie’s Bridgegate scandal didn’t help either, Kurtz said. Add in the state’s well-publicized debt issues, “and I think the higher end [of the market] has gotten hurt a little,” he said, predicting it will “come back, of course; the location is spectacular.”
An Alternative Reading
There’s a fourth explanation though, and it’s one Kurtz might not like: Even with the $20 million price cut, said Dennis McCormack, founder of, and broker for, Prominent Properties Sotheby’s International Realty in Alpine, the home is not just expensive. It's overpriced.
“The home is magnificent, but unlike Manhattan, which seems to have defied the laws of gravity, the wealthier suburbs surrounding New York are still price-sensitive markets,” he said. “What I’ve found is that buyers are very astute about what new construction costs.”
McCormack, who said he brokered the sale of the property from Frick to Kurtz in 2006, said that in the present Alpine market, “when something is priced correctly, it sells.”
“I’ve always found that when something is not selling it’s for one of three reasons,” McCormack said. “Either the product is inferior, it’s in a compromised location, or it comes down to price.”
He helps buyers make a cost analysis: “To build a magnificent top-quality home, a buyer can do that for $600 a square foot,” he said. “And then you factor in the cost of land.”
For an excellent location in Alpine, McCormack said that buyers can expect to spend about $4.5 million for a two-acre property; given that Kurtz’s house sits on about six acres, “it would probably have a market value somewhere in the neighborhood of $12 to $13 million, if the home didn’t exist.”
So, for someone to build a 30,000-square-foot home exactly to their own specifications in McCormack’s calculus, it would cost about $31 million—about $7 million less than what Kurtz said he paid to build the house.
Buyers of Kurtz’s home would be paying a premium of about $18 million, in other words, to not build their own mega-mansion. “That’s what you’re paying for the convenience of not having to go through the sweat and aggravation,” McCormack said. “But the question is, what is that worth to you? I’ve brought a number of Forbes 400 people through that home and, for one reason or another, they’ve opted not to pursue it.”
Kurtz remains optimistic. “This is for any family that wants to live in a magnificent home in a great community,” he said. “It’s for someone who wants to enjoy the outdoors, and to wake up in the morning to see deer, wild turkey—there are swans and coyotes. It’s in the country but just eight miles from New York. You really have the best of both worlds.”
This article was provided by Bloomberg News.
