The rich get richer as the market gets bullish. But when the market slumps, even the wealthy have to pay a price. Since the recent recession hit the world, several billionaires have decided to give up their lavish mansions or yachts. Not too long ago, Russian billionaire Sergei Polonsky sold his hotel Sungate Port Royal, yachts and the house on the Côte d'Azur to put all the proceeds into further construction of his projects. With the market's ups and downs, the economic downturn is still hurting some of the rich and famous. (For related reading, also take a look at 6 Outrageous Billionaire Purchases.)
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David Siegel's $75 Million Mansion
In an effort to save money, chief executive officer of Orlando-based Westgate Resorts, David Siegel announced the sale of his unfurnished 90,000 square-feet mansion in July last year. The property in Windermere, Fla. has been listed for $75 million.
Buyers have an option of buying the mansion completed for an additional $25 million. Some of the highlights of this mansion are 23 full bathrooms, a 6,000-square-foot master suite, a banquet kitchen plus 10 satellite kitchens, a 20-car garage, three pools, a two-story wine cellar and a grand hall with a 30-foot stained glass dome, according to The Wall Street Journal. Siegel currently lives in a 26,000-square-foot home in the nearby Isleworth community.
Paul Allen's 303-Foot Yacht
Microsoft co-founder Paul Allen advertised the sale of 303-foot yacht, The Tatoosh, through Fraser Yachts last fall. The yacht is designed with nine guest rooms and two staff cabins. In addition to a swimming pool and cinema, the yacht features two helicopter launch pads. It can accommodate 24 guests and 35 crew members.
Allen, who was diagnosed with non-Hodgkin's lymphoma last fall, was ranked by Forbes as being the 37th richest person in the world with a fortune of $13.5 billion. He has been lagging behind in the list since his failed investments in companies such as Charter Communications.
Patricia Kluge's Estate
The beneficiaries of billionaire husbands are not left behind by the harsh economy. Patricia Kluge, the divorcee of late American entrepreneur John Kluge, has found herself amid a $25 million foreclosed property in Monticello, Charlottesville, VA., as she defaulted on three loan payments. This home was part of her divorce settlement in 1990; in addition to the $1.6 million she received every week. Bank of America bought the property for $15.3 million.
Kluge is not new to auctioning personal properties. Last summer her jewelry and furniture from the Virginia estate were auctioned by Sotheby's collecting more than $15 million. Additionally, she also lost her winery at an auction in December 2010 for $19 million, after efforts to take the business to national and international markets failed.
Tom Siebel's 62,000-Acre Cattle Ranch
Software billionaire Tom Siebel recently made headlines for selling off his 62,000-acre Montana cattle ranch. The property was sold to Frac Tech Services, a Texas-based oil and gas well fracturing company. Though the price of the sale has not yet been revealed, the ranch was listed at $45 million early last year. Co-incidentally, Siebel along with his high-profile partners are also raising money for their startup company, C3, which has already raised $30 million.
John Paul Getty III's 12-Bedroom Home
The sale of John Paul Getty III's 12-bedroom Irish home still hangs in the air with no promising buyer in sight. Getty, who had been in poor health since 1981, recently died in England. The Gurthalougha House was bought by Getty for 1.27 million euros in 1998 for himself and his socialite mother Gail Getty. The property, on the shores of Lough Derg near Ballinderry, Co Tipperary, has been on sale since September 2010.
The Bottom Line
One of the key reasons for billionaires to sell off their assets during this time may be inflation, according to Richard A. Hogan, a managing director with Merrill Lynch Wealth Management's Private Banking and Investment Group, San Francisco; "People start thinking strategically. They are looking at their collection and asking what are my risks? They are asking do I really need it?"
The wealthy will be evaluating their non-core assets that have a depreciating value or require huge costs to carry till the market surges back. (For additional reading, also check out The 2011 Billionaire Investment Portfolio.)