Lifestyle Liquidation - Estates of the Fabulously Rich
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It's not easy to go minimalist when you owe far more on your toys than anyone is willing to pay for them. Please consider Estates of the Fabulously Rich, Gilded Era Is Going, Going, Gone.
VERO BEACH, Fla. -- Richard and Amanda Peacock spent five years building their dream home, a 10,000-square-foot, orange mansion overlooking the ocean here. They filled it with leopard-skin chairs, pinball machines, antique Coca-Cola signs and six sports cars. It had a room full of 100 hunting trophies -- including a hyena and the head of an elephant -- and an aviary out back housing eight rare parrots.Auction a Spectacular Failure
On a recent Saturday, they held a one-day auction to try to sell it all.
"Four million, do I hear four and a half?" shouted auctioneer Dean Kruse, as he took bids for the mansion. "Come on, people -- the good Lord stopped making oceanfront property a long time ago."
Frank Burden, a local landscaper, picked up Mr. Peacock's Pennzoil sign for $75. Bidding on the scarlet Ferrari, with only 5,000 miles, reached $110,000, a steal compared with its $207,000 purchase price. Marie Davis, a Florida vacationer, picked up several exotic hunting trophies.
"I got a wildebeest for $250!" she said. "What a deal."
Mr. Peacock's auction marked a new moment in the fall of the latest Gilded Age. Fire-sale auctions of mansions, yachts, sports cars and other trappings of wealth have become increasingly common as the rich become less rich. But Mr. Peacock is in the vanguard in attempting to downsize in just one day. The event was less an auction than a lifestyle liquidation, a clearance sale on a decade's worth of conspicuous consumption.
Mr. Peacock's selloff is among the most unusual. A 60-year-old commercial real-estate developer with a mustache and a dark tan, he built his fortune building and owning retail space in Miami's Coconut Grove area.
They bought a piece of oceanfront property for $4 million and spent the next four years, and another $4 million, building the mansion. It has six bedrooms, seven-and-a-half baths, a gym and a barbershop and salon. Outside there's a waterfall, tiki bar and aviary. The couple designed much of the furniture themselves, including the gold and leopard-skin dining-room chairs.
"Richard likes leopard skin, and I like gold, so it was the perfect match," says Mrs. Peacock.
The sprawling "trophy/game room" is stocked with dozens of antique road signs, life-size statues of Muhammad Ali and Green Bay Packers quarterback Bart Starr, antique gas pumps and a cigar-store Indian. Stuffed hunting trophies spill throughout the house, including the fang-baring baboon in the guest room. Mr. Peacock says he doesn't hunt.
Their fortunes began to turn last fall. Mr. Peacock was diagnosed with cancer. His commercial real-estate business, with 30,000 square feet of retail space in Miami, is facing rising vacancies. He also had to shut down his Vero Beach construction company, which was working on residential projects.
The couple now has a $2.2 million mortgage on their mansion, Mr. Peacock says, and a $1 million mortgage on a four-bedroom oceanfront home nearby that they used while building the mansion. Maintaining the house is also costly: $50,000 a year in taxes, $25,000 for insurance and more than $100,000 a year for indoor and outdoor maintenance. That's not to mention the upkeep on their other home.
Mr. Peacock says he is now cancer-free. He says it was the health scare, not financial problems, that inspired him to scale back.
"We don't need all this stuff anymore," he says, adding that the couple plans to buy a cabin in the Blue Mountains. "It's time to simplify."
On the morning of Mr. Peacock's auction, more than 100 bargain-hunters flocked to the auction tent along with dozens more bidding live online. The bids started strong, with the metal signs and animals selling. An online bidder bought the elephant head for $6,750. A bright yellow Honda motorcycle went for $9,500, and a 2003 Country Motor Coach fetched $150,000 -- far less than the $600,000 Mr. Peacock paid for it or the $200,000 he owes on it.
When the six cars came on the block, however, the sale stalled. Only one -- a cloned 1970 Plymouth Hemi Cuda convertible -- reached Mr. Peacock's asking price. The Peacocks didn't accept the bids on the others, including the Ferrari. An Italian speedboat and a pair of jet skis also failed to sell.
Bids on the house ground to a halt at $5.5 million. The Peacocks decided they couldn't let it go for that. Since they didn't want to live in an empty mansion, they pulled the other items, including the parrots, off the block.
In all, 500 items sold for about $300,000. About $200,000 went to pay the auctioneer and other expenses. Both houses are still on the market.
"Nobody's spending money right now," said Mr. Peacock, sitting under the tent with his head buried in his hands. "I guess we'll try to just keep hanging on."
Fittingly, the auction was a spectacular failure. The WSJ article mentioned two other auction failures if I can take the liberty of calling the sale of a $13 million estate for $3.5 million a failure.
Mr. Peacock has more toys than he needs or can afford. Amazingly, he had a bid of $5.5 million for the house and only owed $2.2 million on it. That was enough to pay off his other oceanfront house and still have $2 million left over.
By attempting to "hang on" the Peacocks risk losing it all. I suspect he will. In the meantime how the heck can he possibly get by without that wildebeest head?
Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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