No, Someone Did Not Just ‘Radically Overpay The President’ For His Beverly Hills House

The property at 809 North Canon Drive in Beverly Hills, California, in a satellite image from Google Earth. The 5,400-square-foot mansion was recently sold. (Google Earth)

The next day, the Washington Post reported that Hillcrest has ties to Indonesian billionaire Hary Tanoesoedibjo and suggested that the house may have gone for an inflated price. And Thursday night, MSNBC host Rachel Maddow ran a lengthy segment on the deal, asking: “Why did someone just radically overpay the president for a property in Los Angeles?”

The truth is, no one did. The reported $13.5 million price was squarely within the range of what could be expected for the house. In February, Forbes valued the property at $13 million as part of its twice-annual look at the size of Donald Trump’s fortune. That estimate, just 4% off the reported sales price, was based on conversations with five local real estate brokers, who suggested the property could be worth anywhere from $11 million to $15 million.

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Even the broker who offered the lowest estimate, Joe Babajian of Rodeo Realty, said that $13.5 million was not an outrageous amount of money: “It’s definitely in the range.”

On Friday, Forbes interviewed a sixth broker, Mitra Sisatar of Coldwell Banker. She said one of her colleagues tried to sell Trump’s house a few months ago. “He couldn’t sell it, or he didn’t have enough showings.” Even so, Sisatar said, $13.5 million was within the range someone might expect for the property.

So despite all the hype, the recent sale is not necessarily an example of Trump getting richer off the presidency. Yes, Trump bought the place for $7 million in 2007. And yes, Los Angeles County assesses it at $8.4 million today. But the market has changed over the last 12 years, and the true values of properties in Los Angeles County often diverge from their assessed values. If President Trump pays taxes on his apparent $6.5 million gain, his recent transaction could actually knock down his estimated net worth rather than boost it.

None of which is to say the recent sale is free of ethics concerns. Tanoesoedibjo is an Indonesian business partner of Donald Trump, with his own ambitions for political office. While it’s hard to get inside the head of any real estate buyer, Babajian said some people might be attracted to “the cachet” of buying a property from the president of the United States. Another local broker, Ernie Carswell, agreed: “I believe it sold at the slight premium simply because of who the seller was.”

There are additional issues. Shortly before Trump’s inauguration, his lawyer promised “no new foreign deals will be made whatsoever during the duration of President Trump’s presidency.” If Tanoesoedibjo is in fact the buyer, the recent sale would seem to violate Trump’s pledge.

Not that it would be the first time Trump crossed that line. The president has counted state-owned banks from China and India as tenants in two of his buildings. And last year, he even sold a Las Vegas condo to someone with a listed address in “Taiyuan City, China.”

Forbes.com