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Business Observer Friday, Apr. 26, 2019 4 weeks ago

Stealth run: Realtors reveal inner workings of a secret mansion sale

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A reclusive client with big-dollar designs on the transaction challenged the brokers: Sell it. But do it quietly.
by: Brian Hartz Tampa Bay Editor

If you’re a realtor, how do you sell a 37,000-square-foot mansion that boasts eight bedrooms, a six-car garage and 200 feet of Gulf frontage when the super-private seller doesn’t want it publicly listed for sale?

Just ask Jackie Diaz and Karen Hegemeier, realtors at Premier Sotheby’s International Realty’s Clearwater office.

In January, they celebrated one of the priciest residential real estate sales in the history of the Tampa Bay market — a $16.5 million deal that saw a Belleair Shores mansion belonging to former Philadelphia Phillies superstar Ryan Howard sold to local commercial real estate investor Ben Mallah.

Jackie Diaz, left, and Karen Hegemeier. Courtesy photo.

Diaz shed light on the highly secretive process of selling homes on behalf of elite clients like Howard, as well as the tactics she and Hegemeier employed to lasso a buyer faster than anyone expected. Their experience provides a seldom-seen glimpse into the world of elite-level real estate and the demands and challenges that come with it.

“Ryan did not want any publicity, nothing on websites, no international marketing,” Diaz says of the challenge presented to her and Hegemeier, who have known each other for 30 years and began working together at Sotheby’s in 2013. “He wanted us to keep it very, very confidential.”

DREAM HOME; MARKETING NIGHTMARE

Built in 2014, the mansion at 1700 Gulf Blvd., Belleair Shores, features a lazy river; waterfall; climate-controlled wine cellar; bowling alley; movie theater; fitness center; outdoor bar and kitchen; trophy room; and an attached guest house — and those are just a few of its highlights. It was built on two lots, giving it the greatest amount of Gulf frontage of any home in the area.

“I was living in Clearwater Beach when they broke ground,” Diaz recalls. “Everyone was interested.”

Howard was a household name in the area due to the Phillies’ spring training home in nearby Clearwater, so onlookers crowded the beach to get a look at the creation of the slugger’s new palace. That early over-exposure might have soured the intensely private Howard on the property, however, because Diaz says he and his wife rarely visited their Florida home, and even less so after the burly first baseman parted ways with the Phillies in 2016.

'If Ryan Howard would have advertised his house, he would’ve had a lot of [potential] buyers. It’s to my benefit that he didn’t.' Ben Mallah, Equity Management Partners 

Howard approached the Sotheby’s team in April 2018 with his intent to sell the mansion, but he had a litany of conditions, says Diaz. All agents and potential buyers who visited the property were required to sign a non-disclosure agreement (NDA) stating they would not tell anyone about the home being for sale. Also, Sotheby’s Auction House’s 12,500 preferred clients were not permitted to know the exact address of the property, only the city and state, and they were allowed to view only nine photos of the palatial home — and no videos.

The kicker? Howard wanted $20 million — even though the price was listed “upon request” — and there were zero comps for the property in the entire Tampa Bay area.

Sotheby’s private, invitation-only, password-protected real estate website offered access to some of the world’s most discerning buyers, and because of the innovative way it was set up, Diaz and Hegemeier could easily find out who viewed the listing and how often they checked it out. But the agents knew they would have to get creative with marketing the home, and because of the strict limits on what information could be given out, they’d have to work their local contacts if they were to maximize their chances of attracting a presentable offer.

“We decided, one-by-one, who the top local agents and potential buyers would be,” Diaz says. “We reached out to them directly. They had to sign an NDA and provide proof of funds” to even view the residence. Tampa, Belleair and Sarasota were the agents’ main areas of outreach, she adds, but they had to look for comps for the property as far south as Naples. Sotheby’s even created a hardcover coffee-table book bursting with hundreds of full-color photos of the home that cost some $50,000 to produce. 

The real estate duo reached out directly to five multi-millionaires and three billionaires living in the Tampa Bay area. But their first serious nibble came from an agent in Miami who represented a retired Wall Street banker.

MATCH GAME

Diaz and Hegemeier’s strategy to conduct their own word-of-mouth guerilla marketing campaign at the local level paid off when a business associate told Mallah — the ultimate buyer — about the mansion for sale. A self-made commercial real estate magnate who pals around with pro wrestlers and stars in a YouTube series, “Life: For Sale” — whose opening credits show him lighting a cigarette with a $100 bill — Mallah, 53, lives large and likes to be seen doing it.

Pretty much the exact opposite of Howard, you might say.

"I like to buy the best I can when it comes to certain things in life,” says Mallah, who adds he grew up poor in Queens, New York. “When you come from nothing, you appreciate nice things.”

Mallah, now trying to sell his other houses at 288 Spottis Woode Court in Clearwater and 15566 Gulf Blvd. in Redington Beach, says he and his wife, Karla, had been looking to consolidate into a single waterfront home on the Gulf. But they couldn’t find a fit for their $5 million budget. 

Tony Utegaard, Mallah’s partner in Car Pool Tables, a Pinellas Park company that makes billiards tables that look like famous vintage sports cars, says Mallah was the ideal buyer. “As his partner for 15 years and knowing him well, he bought this house for one reason and one reason only: It’s the biggest and most expensive," says Utegaard. "That’s it. If there was one a little bigger and cooler, he would’ve bought that one.”

Mallah has amassed a commercial and residential property portfolio valued at $400 million, he says. Via his Largo-based company, Equity Management Partners Inc., he buys distressed real estate assets, fixes them up and flips them. One recent example is the Bay Harbor Hotel & Conference Center in Tampa’s Rocky Point area, now known as the Godfrey Hotel & Cabanas. Mallah bought the hotel in 2012 for $15.25 million and sold it three years later for $34.5 million. He says he put about $3.5 million into the property before selling it. 

Mallah believes Howard's secrecy worked to his advantage. Howard wanted $20 million for the home but Sotheby’s had priced it at $18 million, so Mallah went low, offering $15 million. Howard countered at $16.5 million, including all the furniture. Nine days later, the deal was done.

Mark Wemple. Auto racing legend Mario Andretti recently struck a deal to endorse billiards tables made by Car Pool Tables, a Pinellas Park company in which Ben Mallah has a stake.

“If Howard would have advertised his house, he would’ve had a lot of [potential] buyers,” Mallah says. “It’s to my benefit that he didn’t.”

Diaz and Hegemeier also couldn’t believe their good fortune. The home had been officially available for only about six months when Mallah began looking at it. The agents had been prepared to put in substantially more time and effort to make a sale. 

“With a home in this price range, one hopes to sell within two years,” Diaz says, “but oftentimes that does not happen.”

Diaz declined to disclose the marketing budget or the commission earned on the sale, only to say they got paid around 6%, give or take a percentage point higher or lower. At 6%, standard commission for representing the buyer and seller in a residential sale, the brokers would have made $990,000.

For Mallah, in addition to a new palatial home, sniffing it out was on par with how he runs his business. “I had no knowledge it was for sale,” he says. “That’s how I find a lot of my deals — just by hearing a little piece of information and acting on it.”

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