Former Janus manager faces million dollar loss on home

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Laurent Saltiel has this Cherry Hills home on the market for $5.9 million. The only problem - he paid $6.7 million, less than a year ago.

Laurent Saltiel is such a whiz at international stock investing, that the investment firm of AllianceBernstein LP in New York City, lured him from Denver, where he managed the $2.44 billion Janus Worldwide Fund for the Janus Capital Group.

Six months before the announcement last May that Saltiel would be a team leader and manage the International Large Cap Growth/Global Large Cap Growth funds for AllianceBernstein, Saltiel and his wife, Kimberly, paid $6.7 million for a home on more than 5 acres in Cherry Hills Village. It was the most expensive home to sell in the Denver area last year.  (For the original story in InsideRealEstateNews, please visit Janus Manager Pays Record Price For Home.)

Now, he has put the 10,409-square-foot  home,  on the estate formerly owned by golf pro Craig Stadler, on the market for $5.9 million. It was designed and built by highly regarded Debra Toney, who initially hoped the home would fetch in the neighborhood of $8 million. Cherry Hills Village values the home at $7,225,600 for tax purposes.

That means that Saltiel, if he gets his asking price, will face an $800,000 loss. And when the real estate commissions are thrown in, he will lose $1 million or more. Saltiel is not alone. While there are signs that the 7-million home market in the Denver area is picking up (see a previous blog, Million-dollar home showing rise) it’s because sellers such as Saltiel,  are willing to take big financial haircuts to unload their properties.

Edie Marks, the Kentwood Co. broker who sold the house to Saltier last November, now is listing the home at the new price.

“It was not easy to get him to that,” Marks said. ” He has the ability to wait as long as he has to. But I told him it does not make sense to just have this home sitting here in Colorado and convinced him to go with this price. He has the ability to weather this and hold it until the market comes back. But I thought it would be smart to sell it, even at a loss, and just put it behind him.”

Marks said that Saltier family has just moved to New York, where they bought a unit in a high-rise in the middle of Manhattan. They also own a home in Washington state, she said.

And there is a big cost to holding the home.

Daily tab: $5,176

Records indicate he has a $4.69 million loan with a 5.375 percent interest rate. Monthly principal and interest payments would set him back $26,277. In addition, annual property taxes run $54,255.62, or $4,521 a month. If he was lucky enough to sell it after eight months of ownership, and figured that he paid a 5 percent commission of $295,000, the cost of ownership would amount to about $1.26 million, including the mortgage payments, taxes, loss on the home, and commission. Another way to look at it, that would equate to  about $5,176 per day to own the home. And that’s not even including his utilities, lawn maintenance and other costs.

Interior photo of home listed by Edie Marks.

At the peak of the market, the land itself would have been worth more than $5 million, Marks said. And she estimated the replacement cost at more than $10 million. “The cost of building homes really has not gone down much at all,” she said.

Marks said people house-hunting today for homes priced in the stratosphere, expect to get unbelievable bargains.

‘No. 1, it  is really about the price and No. 2, they have to feel they are getting a great deal,” Marks said. Unlike Saltier, many people selling at the high-end today do not have the financial ability to hang on, she said.

Buyers smell blood

“I think most of the sales we are seeing at the upper-end are bloods sales,” Marks said. “They smell blood. Even though that is not the case in this sale, you do get a lot of those. Or, the bank owns it and is ready to deal.”

She said that Saultier is firm on his price, and won’t budge from the $5.9 million.

Price not low enough

But Greg Geller, principal of Vision Acquisitions LLC, said he thinks Saultier will need to come down more, a lot more, before he can sell it.

“I’m sure he is a really smart guy and he understood when he bought it that it needed very much to be a long-term hold,” Geller said. “As a short-term hold, you’re not going to be able to sell it as $6.7 million any time soon, and he knew that. In today’s market, the number of people paying more than $3 million for a home is a very short list. High-end real estate is on life support.”

Marks said that she thinks the buyer of the home “will be someone who is very comfortable in his own skin, as Laurent is. They will not be trying to prove anything to anybody.  Yes, it is over 10,000 square feet, but it is so warm and comfortable. And the grounds are fabulous. Some lucky buyer is going to take advantage of a great deal.”

Marks said that so far she has only had one showing. “I’m really just starting to market it,” she said. “The family has been living here until recently.  And after 100-degree heat on the East Coast and close to 100 percent humidity, they plan to come back in the near future to beat the heat.”

One wag familiar with the deal, had this to say about Saltiel:  “He should stick to picking stocks, not real estate.”

Contact John Rebchook at JRCHOOK@gmail.com or 303-945-6865.

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John Rebchook

John Rebchook has more than 30 years of experience in writing and communications. As the Real Estate Editor for the Rocky Mountain News, he wrote about residential and commercial real estate for 26 years. He has won numerous awards for business stories and columns that he wrote, both as an individual and part of teams. In addition to real estate, he also covered economic development, banking and financing, the airlines, and cable TV for the Rocky. In addition, he was one of the original freelance writers for GlobeSt.com, covering commercial real estate for the Internet publication.

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