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The $238-million, most-expensive home sale in U.S. history

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NEW YORK—In Manhattan, where multimillion-dollar real estate sales are downright routine, a hedge fund tycoon has managed to set a new standard for conspicuous consumption by paying a fortune for an unfinished piece of property in the sky.

The billionaire, Kenneth C. Griffin, spent $238 million for a penthouse at 220 Central Park South that is still under construction, making it the most expensive residential sale in U.S. history.

A crane sits atop the new skyscraper at 220 Central Park South, New York City, where the penthouse set a U.S. record by selling for $238 million.
A crane sits atop the new skyscraper at 220 Central Park South, New York City, where the penthouse set a U.S. record by selling for $238 million.  (Bebeto Matthews / AP)

What’s more, in a New York tale that is not entirely uncommon, the 79-storey building where Griffin’s penthouse will soon exist was built after the landlord evicted dozens of middle-class tenants from their rent-stabilized apartments in what was a fairly modest building with 20 floors.

Cathy Marshall, a tenant in the old building, lived there for 36 years in a rear apartment on the eighth floor. Although she missed out on the scenic views, she enjoyed being on the route of the Macy’s Thanksgiving Day Parade and the New York City Marathon.

“People on your floor, if you were sick, they went down and got you soup,” said Marshall. “I was very happy there. But change happens.”

With a net worth estimated at $10 billion, Griffin, founder and chief executive of global investment firm Citadel, is among the richest people in the world. And in recent years, Griffin has become increasingly willing to flaunt his wealth, spending lavishly on modern art, philanthropy and trophy real estate, even as income inequality is roiling the national political debate.

Twice divorced, Griffin has three children and is primarily based in Chicago, where Citadel is headquartered. Through a spokesman, Griffin declined to comment for this story.

He is a globe-trotting homebuyer, leaving a trail of his pricey purchases, from a $60-million penthouse in Miami to a $122-million mansion in London.

All told, according to a person familiar with Griffin’s spending, he has spent approximately $700 million on real estate and nearly as much on art.

But Griffin has given away about $700 million, according to the person familiar with his finances.

He is on the board of the Whitney Museum of American Art, which named the lobby of its new building after him. He donated $40 million to the Museum of Modern Art$19 million to the Art Institute of Chicago and $16.5 million to fund the largest dinosaur ever discovered at the Field Museum of Natural History in Chicago.

Griffin has also donated huge sums to educational institutions, including Harvard University and the University of Chicago.

Griffin has cited his maternal grandparents as inspiration for his philanthropy. They ran a fuel oil business in Illinois, and when some customers could not pay their bills during the winter, his grandparents would extend them credit.

The Harvard graduate made his fortune through finance. As a sophomore in 1987, Griffin began trading out of his dorm room using a fax machine, an early personal computer and the phone. Just three years later, he founded Citadel in Chicago.

The firm grew rapidly, and today Citadel, which is privately held, manages some $28 billion, trading stocks, fixed income, commodities and more.

And Griffin has proved adept at making a profit even during market turbulence. Last year, Citadel’s flagship fund was up 9.1 per cent, despite a difficult end of the year for most markets. In the hedge fund industry, where star managers are rewarded with outsize returns, such performance is extremely lucrative. In 2017 alone, Griffin earned some $1.4 billion, more than any other hedge fund manager, according to Institutional Investor’s Alpha magazine.

Wall Street’s compensations have made New York look like a Monopoly board come to life; there are so many ultraluxury residential buildings along the southern edge of Central Park that it has been nicknamed “Billionaire’s Row.” That Griffin is spending so freely at a moment when populist movements are gaining momentum around the globe struck some critics as especially tone deaf.

“The plutocrats continue brazenly flaunting the excesses that have enraged much of humanity,” said Anand Giridharadas, author of Winners Take All, and a critic of wealthy philanthropists. “They’re displaying very little awareness of the moment that we are in.”

On Thursday, economic advisers to Sen. Elizabeth Warren, who is running for president, said that she would propose introducing a new “wealth tax” on the richest Americans.

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Victoria real estate agent disciplined for false advertising, encouraging cash deal to avoid taxes

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A Victoria real estate agent is facing $9,000 in fines and a 60-day licence suspension after breaking several professional rules during the sale of her father’s half-million-dollar property, according to a decision by the Real Estate Council of B.C. 

Whitney Garside’s missteps — outlined this week in a disciplinary decision posted on the council’s website — included falsely advertising the property as being almost twice its actual size and advising the buyer they could avoid the property transfer tax if they paid cash directly to the seller.

The property on Burnett Road in Victoria was being sold in 2016 by the real estate agent’s father. That relationship was disclosed and isn’t among the reasons she has been disciplined.

According to the disciplinary consent order, Garside told the buyer — whose name is redacted — that by paying $42,000 cash on the side, the value of the property could be reduced to avoid paying the property transfer tax.

That cash arrangement was not shared with Garside’s brokerage, Re/Max Camosun, a failure that contravened the Real Estate Services Act.

The council also ruled that she “failed to act honestly and with reasonable care and skill” when she advised the buyer the property transfer tax could be avoided by paying cash directly to the seller. 

The council’s discipline committee also found that Garside committed professional misconduct when she failed to recommend the seller and buyer seek independent legal advice, specifically regarding the property transfer tax and the cash agreement.

Another issue the council considered professional misconduct involved the size of the property in question.

The council ruled that Garside published false and misleading advertising and failed to act with reasonable care and skill when the property was advertised as 8,712 square feet, when in fact a portion of the lot belonged to the Ministry of Transportation, and the actual size was just 4,711 square feet.

The discipline committee ordered Garside’s licence be suspended for 60 days, which will be completed Jan. 3, 2021.

She has also been ordered to complete real estate ethics and remedial classes at her own expense.

Garside was also fined $7,500 as a disciplinary penalty and $1,500 in enforcement expenses.

She agreed to waive her right to appeal the council’s discipline committee’s decision in September.

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Frisco apartment community sells to Canadian investor

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A Canada-based investor has purchased a Frisco apartment community as part of a larger Texas deal.

The 330-unit Satori Frisco apartments opened last year on Research Road in Frisco.

BSR Real Estate Investment Trust bought the four-story rental community that was built by Atlanta-based Davis Development.

Satori Frisco was more than 90% leased at the time of sale. The property includes a two-story fitness center, a car care center, a dog park and a resort-style swimming pool.

The Frisco property sold along with Houston’s Vale luxury apartments in a deal valued at $129 million.

“BSR recently exited the smaller Beaumont and Longview, Texas, markets and also sold noncore properties in other markets,” John Bailey, BSR’s chief executive officer, said in a statement. “We are now using our strong liquidity position to invest in Vale and Satori Frisco, modern communities in core growth markets with the amenities our residents desire.”

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House prices on Prince Edward Island continue steady climb

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Residential real estate prices on Prince Edward Island continue to climb at a rate higher than the national average, according to the latest report from a national organization. 

The Canadian Real Estate Association released monthly figures for November 2020 on Tuesday.

They show that the average price for a resale home on P.E.I. is about 21 per cent higher than it was a year earlier. 

Only Quebec had a bigger year-over-year increase, at about 23 per cent. Overall across Canada, prices were up 13.8 per cent year over year in the ninth month of the COVID-19 pandemic.

“For the fifth straight month, year-over-year sales activity was up in almost all Canadian housing markets compared to the same month in 2019,” the report noted.

“Meanwhile, an ongoing shortage of supply of homes available for purchase across most of Ontario, Quebec and the Maritime provinces means sellers there hold the upper hand in sales negotiations.”

That lack of houses coming onto the market compared to the demand means that in those provinces, there is “increased competition among buyers for listings and … fertile ground for price gains.”

There have been anecdotal reports for months that Prince Edward Island’s low rate of COVID-19 infection and looser rules around social activities have been encouraging people to buy homes on the Island. 

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