ZILLOW BLOG
s Mark Zuckerberg’s social networking company, Facebook, celebrates its 10th anniversary tomorrow and has worldwide usage by 1.23 billion people, the tech titan finds himself at the forefront of a real estate trend: tech bosses who are buying up their neighbors’ properties.
Zuckerberg made headlines last fall when he reportedly spent $30 million to purchase four of his neighbors’ homes. Not only were the homes not on the market, but Facebook’s chairman and chief executive officer turned around and leased them back to their original owners.
Two weeks later, Yahoo CEO Marissa Mayer reportedly bought a funeral home near her residence, with the Daily Mail proclaiming, “Yahoo! Marissa Mayer does a Zuckerberg and starts to buy up her neighborhood.” Three days later, the Silicon Valley Business Journal announced “Elon Musk pulls a Zuckerberg,” when news surfaced that the inventor and Tesla Motors CEO had purchased a home across the street from his Bel-Air pad.
While this tech titan home-buying spree was newsworthy in its own right, buying up neighbors’ homes is not a new phenomenon. From Brad Pitt to Reese Witherspoon, celebs long have been known for making multiple real estate moves in their neighborhoods. The question is whether tech titans have the same motives as Hollywood stars or if this new breed of celebrity is rewriting the high-end real estate playbook. To find out, we asked The Agency’s Kofi Natei Nartey, who helps celebrities and athletes buy and sell homes on HGTV’s “Selling LA,” and Silicon Valley real estate agents of the Boyenga Team to share their insight.
Privacy is paramount
According to Nartey, it’s common for Hollywood stars to purchase neighbors’ homes as a way of protecting their privacy.
“It’s a way to control who is your neighbor,” Nartey explained. “In the Hills, there are homes with amazing views, but with that comes limited privacy.”
Eric Boyenga says it’s the same for high-profile tech execs, who are increasingly becoming household names.
“It’s not uncommon for entrepreneurs to purchase neighbors’ property,” he said. “In the social era of today, those like Zuckerberg tend to be a mix of Hollywood star and tech titan, whereas a lot of execs in the past didn’t get a lot of fanfare.”
A normal quality of life
But unlike A-list celebs who are accustomed to dodging paparazzi, Boyenga says tech bosses are often in search of a more “normal” quality of life.
“We’re more engineer-driven here. Execs don’t want any news about them,” he said. “For a celebrity, that’s par for their course, but for a tech entrepreneur, they want the focus on their firm and [to have] a life outside of that.”
Younger tech company execs — including 29-year-old Zuckerberg — are drawn to the vibrant culture in Palo Alto.
“We have hills like the Hollywood Hills here that are more private, gated estates with views,” Boyenga said. “But, Palo Alto is where things are happening. It’s a very idyllic neighborhood and a great place to raise a family.”
Zuckerberg purchased three homes behind him and the one next door in his Palo Alto neighborhood.
He says most people who move to Palo Alto want to keep the neighborhood the way it is, and tech entrepreneurs are no exception. For instance, when Zuckerberg began buying additional homes in his neighborhood in December 2012, it was because he reportedly learned of a developer’s plans to capitalize on his residence in the area.
“These are tech titans that want to be part of their community but also want to make sure they don’t have someone move in next door that they don’t want there,” he explained. “It’s not a control thing as much as about quality of life.”
No way to buy bigger
Because Silicon Valley entrepreneurs are drawn to historic neighborhoods such as Old Palo Alto and Crescent Park, they’re subject to a competitive market.
“Inventory is so hard to come by,” said real estate agent Janelle Boyenga, Eric’s wife. “What we’ve seen is people are buying properties and keeping them to pass on to generations to come. Inventory is only going to get tighter as the years go by.”
And, unlike celebs who buy sprawling Beverly Glen estates or Manhattan penthouses spanning multiple floors, execs living in the Valley don’t always have the choice to buy a bigger home.
“In Old Palo Alto, there are not many large lots. Most are less than a quarter of an acre,” Eric Boyenga said. “Only a handful are half an acre, and they just don’t get sold off.”
Making room for friends & family
But when tech titans buy neighboring properties, it instantly raises questions about what they’re going to do with the lot and how it will impact the neighborhood.
“Marissa Mayer [buying the funeral home] — I’m curious about that one,” Boyenga said. “It could just sit there for years to keep a big development from coming near her property.”
He’s skeptical that Mayer can drastically change the property, even if she wants to, because of building restrictions. For this reason, Boyenga says most people tend to use neighboring property as a place to have friends come and visit.
“It’s not easy to buy a parcel and take the house down,” he said. “Most of these people are looking to use for guesthouse purposes or just for privacy.”
Rumors about high-profile real estate purchases are common — fashion mogul Kimora Lee Simmons’ reported 2009 purchase of her neighbor’s tennis court to build a pool is a good example. Nartey points out that often rumors are just because, frankly, it’s very difficult to drastically change a residence in L.A.
“You have to get permits from the city for any remodel or new construction — anything that might undermine the aesthetics of the neighborhood,” he said.
At the end of the day, whether celebrity or tech titan, it’s about finding a place to call home.
“More than anything else these buyers are buying for privacy and quality of life,” Boyenga said.
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