Want Privacy As A Luxury Buyer? In Info Age, Don’t Count On It, Agents Say

Want Privacy As A Luxury Buyer? In Info Age, Don’t Count On It, Agents Say

In early January, the world learned of the “tantrum” New York Yankees All-Star Alex Rodriguez threw to buy a co-op in Manhattan’s legendary Beresford building.

When New York billionaire investor Ron Perelman moved to liquidate homes, yachts, artwork and a jet, readers had plenty of news outlets to turn to for tracking each sale in near real-time.

Want a list of celebrities living in a tony neighborhood or a rundown of when and where celebrities and other public figures buy and sell homes? We’ll give it to you.

It’s long been a given that when a real estate transaction involves someone under the public spotlight — from pro athletes to movie stars to wealthy investors — news of the sale is going to go public.

That doesn’t mean they like it.

In fact, public figures often go to great lengths to conceal their identities when buying and selling real estate, attempting to hide the news of the sale and maintain some semblance of privacy. But it rarely works.

“We used to be able to hide identities — especially if they’re a celebrity,” Aaron Kirman, an agent with Compass in Beverly Hills, told Inman. “My experience the past couple years is it’s almost impossible.”

A recent example involved a personality known much more for past allegations of bullying and abuse than for keeping quiet about grievances.

Michael Arrington

TechCrunch co-founder and crypto investor Michael Arrington last month went public with claims about a listing agent he says leaked news of his purchase of a home near Miami.

Arrington claims he took what he called “extreme measures” to keep the deal under wraps, saying there are “unique security threats against people in crypto.” 

Yet despite steps taken to keep the public from finding out where he lived, Arrington’s plan was thwarted.

The case brought to the forefront an issue that may be much more common than it seems: No matter how hard they try, public figures looking to keep real estate deals private face a near impossible task.

Experts who spoke with Inman said that with incentives from the potential publicity of having worked on a celebrity transaction, it’s best not to expect the deal will remain hidden from the public eye.

But they can still try. And they often do.

Such was the case with Arrington, who last month said a Florida listing agent had “leaked” the news of the purchase, which he said led to numerous stories about the deal.

“Her only reason for doing this was increased marketing exposure,” Arrington wrote in a thread on Twitter. “She cared little or not at all for my families (sic) safety. She knew quite well why we requested confidentiality; she just didn’t care.”

Arrington claimed he was forced to sell the home he had recently picked up for $16 million, and he referenced ongoing legal action. 

The listing agent Arrington blamed for the publicity, Jessica Adams, denied wrongdoing in an email to Inman.

“I do not nor have I represented Mr. Arrington in any real estate transaction. I was the listing agent for ONE Sotheby’s representing the sellers in a sale in Miami, Florida, for the 2021 calendar year,” Adams said in the statement, which included an attorney. “There was no Confidentiality Agreement or Non-Disclosure Agreement governing the subject sale, nor was one proposed or presented by the buyers at the time of making the purchaser offer for the property.”

Arrington did not respond to a request for comment.

The blow-up gave the public an insight into an undercurrent in an industry where people crave anonymity they just can’t find.

Where to hide?

Last spring, a different waterfront home in Miami sold for $14 million, a new record price for the neighborhood. The buyer was StellaBean Holdings LLC, and brokers on both sides of the deal declined to comment when contacted by news outlets.

So how, then, did The Real Deal go on to reveal the buyer was Barstool Sports founder Dave Portnoy?

If it’s so common that buyers’ names are revealed, why did Arrington blow up about his case in public and single out Adams?

The primary reason for privacy and discretion is the safety of the client,” said Jordan Stuart, director of Keller Williams Sports + Entertainment. 

Those who spoke with Inman said the apparent incentive behind letting the public know about a high-profile transaction might encourage news of the deal to get out.

Taso Pardalis | Pardalis & Nohavicka Attorneys

“A lot of times the brokers obviously want to say they did that deal. It’s like street cred for them,” said Taso Pardalis, partner at Pardalis and Nohavicka Attorneys in New York City. “I don’t know that the broker did that, but that’s a big deal. If you get a high-profile client, you want other high-profile clients to find you.”

Pardalis’ team, which specializes in real estate transactions, said there are ways to attempt to keep deals private, including nondisclosure agreements (NDAs.)

An NDA is a sort of legal contract that seeks to protect the identity of parties involved in a deal.

“One of the main things is putting an NDA in there right at the beginning with whoever’s interacting with the client,” Pardalis said. “Immediately we’ll say, ‘If you want to speak about or to this client, you’re signing an NDA out the gate.’”

Arrington said he purchased the home through a trust and had a confidentiality agreement in place, both measures that seek to keep the identity of people involved in real estate deals out of the public eye.

Another way to attempt to maintain privacy is through trusts or limited liability companies.

Tucked into the Wasatch Mountains overlooking Salt Lake City, there’s a mansion owned by an entity called WOW COOL HOUSE LLC. The real owner? Singer-songwriter Post Malone, according to the New York Post.

The tactic of listing ownership under a corporation or two is a common practice when attempting to keep things discreet.

“What you often see is multiple LLCs. And possibly even a trust that those LLCs are sitting in,” Pardalis said. “And then the person signing on behalf of those could be a trust administrator, or someone who has authority to sign by power of attorney or by corporate resolution giving them ownership.”

And yet deals still become public. How?

Managing the inevitable leak

Brokers, home inspectors, appraisers, title companies, insurance agents, a contractor hired to make a repair. The list of people involved in a real estate transaction on either side of a deal is long, so the potential that word still gets out is always there. 

“There’s so many players involved in the transaction, from escrow to title to everyone in the middle,” Kirman said. “One slip and it’s just out.”

There’s a $2 million, 5,000-square-foot mansion in Las Vegas that was owned by Chexy Trust. In reality, it’s Shaquille O’Neal’s house, and it became public knowledge after the listing agent publicly congratulated the retired basketball pro and his agent.

Sometimes no one needs to slip up. Kirman said the news media has become more adept at sniffing out who’s really behind a big deal.

“Today’s journalists and media [are] so savvy,” Kirman said. “I can’t tell you the lengths clients go to get out — including buying in an anonymous name that’s not tied to a trust.”

Aaron Kirman | Compass

If that’s the case with non-celebrity deals, the incentive is magnified when it comes to closing transactions for famous people.

“It’s kind of the fuckin’ wild west,” said one agent in Beverly Hills who has handled celebrity listings in the past but asked to remain anonymous. “You get these agents who are thirsty to be around celebrities or being celebrity-adjacent. And they tend to hype it up or leak it.”

Real estate documents are often public, and the press is often hungry for a scoop on a high-profile deal, Kirman said.

Given the likelihood of publicity, Kirman recommended instead being proactive about the deal.

“I have not been able to hide any celebrity or high-profile buyer in the past two years,” Kirman said. “Which is why I think mitigating and managing the story is a much better approach.”

One last hope?

Keller Williams’ Stuart typically works with people like Shaq, A-Rod and other professional athletes who frequently relocate all over the country.

Jordan Stuart | Keller Williams Sports + Entertainment

He said that even with trusts, LLCs and NDAs in place to try to keep client deals discreet, the types of homes he’s touring with clients immediately narrows down the field and increases the likelihood that the news spreads after an eventual sale.

“Some other listing agent will alert the media that this politician or this corporate CEO or this athlete or this rapper is now living in the neighborhood,” Stuart said. “They make that connection because of me showing that person property 30 days earlier.”

His current best practice comes at some personal expense: He conceals the identities of his celebrity clients, he said, by removing his own identity from a transaction. On paper, it makes his annual sales numbers appear lower, he said. But it protects clients.

“I honestly expect more people should be doing that. But when there’s egos involved. Sometimes you want to be behind the sale and it can end your career,” Stuart said. “It can literally end your real estate career.”

Deep in the sea of responses to Arrington’s posts about his experience was a reply from Kieran Kelly. 

“On a serious note this is typical of real estate agents unfortunately,” Kelly wrote to Arrington, pitching his Barbados-based real estate company as a worthy alternative.

When reached for comment, Kelly declined to provide details even about his company’s privacy policies and what it does to keep client deals quiet.

“In short Chestertons Barbados caters to the ultra wealthy from across the globe and our clients’ security, confidentiality and privacy is our utmost priority,” he wrote in an email. “We do not disclose client details to anyone.”

It’s not clear where Arrington moved, when he sold his new Miami house, or if he even tried to sell it at all.

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