A humongous house known as Copper Beach Farm in Greenwich, Connecticut went on sale in May for $190 million, making it the most expensive home on the U.S. market.
After seeing images of the property, there's no doubt it's incredible. But the $190 price tag is still surprising — that's nearly $60 million more than the current record price for a private home.
Now The New York Times' Elizabeth A. Harris reports that the waterfront estate's high price tag isn't because of its acreage and 15,000-square-foot living space, but because the home carries with it more than $120 million in debt.
According to Harris, the current owners — timber magnate John M. Rudey and his wife Laurie Rudey — have taken out a series of mortgages on the property through companies they own:
By the end of 2010, companies owned by the Rudey family had a $59 million mortgage on one portion of Copper Beech Farm and a $79 million mortgage on the forestland in Washington, both with Bank of America. Those loans were cross-collateralized and personally guaranteed by Mr. and Mrs. Rudey, meaning that if they fell behind in payments, the bank could force the sale of either property and, if they still came up short, the Rudeys would be personally liable. They also had $65 million worth of mortgages, again through a corporation, on another section of Copper Beech with M&T Bank, effectively bringing the total debt associated with the property to as much as $203 million.
In 2011, Bank of America started foreclosure proceedings on its portion of Copper Beech Farm. The Rudeys, meanwhile, had filed a suit against the bank, alleging “predatory lending practices,” among other accusations. The following summer, those two lawsuits were dropped.
The Rudeys have since struck a deal for the 50,000 acres of Washington forestland with Washington State Department of Natural Resource for $97 million, according to the Times, and have sold their Fifth Avenue apartment for $16.5 million.
Now, it's Copper Beech Farm's turn on the market.
Time will tell if the Rudeys get their price. But to put the astronomical $190 million asking price in perspective, the most expensive property ever sold in Greenwich was a $45 million estate that changed hands in 2004, and the most expensive home ever sold in the U.S. is believed to be a $132.5 million Montana Ranch that reportedly sold to real estate mogul Stanley Kroenke in November 2012.
Meanwhile, Mr. Rudey’s real estate broker David Ogilvy told the Times that this is just the way real estate planning works for wealthy families.