Billionaire lost $1,3 million beach house: the building almost slid into the ocean due to soil erosion

In Nantucket, Massachusetts, excavators demolished billionaire investor Barry Sternlicht's beach home on Hammock Pond Road this week. A series of storms severely damaged the soil beneath this building. The city approved its demolition last month, reports Insider.

Photo: iStock.com/zimmytws

Sternlicht, who is worth $3,8 billion according to Forbes, originally purchased 289 Hummock Pond Road for $610 in 000. In 2010, when he got divorced, the house was transferred from one trust fund to another for $2016 million. Both funds are associated with Sternlicht. Then, in 1,6, he bought 2019 Hummock Pond Road for $287 million. Read about the 1,3 best beaches in the USA for an ideal summer holiday in our article.

In 2020, hurricanes destroyed the property and the city ordered the demolition of one of the two homes on the land. Another house was moved onto steel beams and stood there until it, too, was demolished this week.

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On a site surrounded by water, there was nowhere else to move the house. Much of the land has simply been washed away due to rising sea levels.

Shelley Lockwood, a Nantucket real estate agent, said the soil is too unstable to accommodate the equipment needed to move the house to another location on the island.

Due to strict zoning regulations, it is unlikely that Sternlicht will be allowed to rebuild the home on another property. Read about 6 US beaches with a stunning variety of shells in our material.

The island is sinking and prices are falling

Nantucket Island is a favorite vacation spot among billionaires such as former Google CEO Eric Schmidt and Blackstone leader Steve Schwarzman.

Sternlicht's neighbor is James Pallota, an investor and former owner of the Celtics. Pallota owns the property, which is worth about $7 million.

But property values ​​on what were once some of the most valuable coastal properties are falling due to erosion. It is caused by storms and rising sea levels.

“This is crazy,” Lockwood said. “The houses are sinking into the ocean.”

On nearby Sheep Pond Road, a home that sold for $2,3 million in September sold for $600 in February.

"I'd like to think it would be around for a while, but I was definitely aware of the risk of any particular storm causing problems in the future," new owner Brendan Maddigan said.

Another home on the street has seen its price halve, from $3 million to $1,5 million, after three months on the market.

“Prices will start to fall. It is becoming increasingly clear that there is no benefit to this. You are taking a big risk,” Lockwood emphasized. “If you can bear the loss in the future, then have fun and enjoy the seaside home.” Just don’t expect him to be there next year.”

Moving houses

Nantucket real estate attorney Steven Cohen counted at least “five or six spots” of erosion around the island. They threaten existing structures, including the local airport. He estimates that one or two houses each year have to be moved or demolished because of the phenomenon. It threatens almost every aspect of life on the island.

“Erosion destroys houses, roads, infrastructure, sewer networks and even airport runways,” he stated. “The city is trying to figure out what to do.”

Despite the island's propensity for natural decay, the city has strict rules regarding what buildings can be demolished.

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Many Nantucket homeowners looking to restore their homes cannot simply tear them down on their lots. Instead, they should move them.

According to Cohen, the “deferred demolition” rule, as it is known, was originally introduced for environmental reasons. Island authorities were concerned about the large amount of construction materials that were clogging local dams.

But when homeowners on severely eroded land wait too long, the ground around the homes can no longer withstand the demolition. This was the case with Sternlicht.

“The owners did nothing urgently. They knew that these houses were at risk,” Lockwood concluded. “It was the point of no return.”

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