In 1998, MGM billionaire Kirk Kerkorian paid $4 million for a Beverly Hills property and built a 9,700-sq-ft mansion; 17 years later, the property sold for $19 million

In 1998, Armenian-American businessman Kirk Kerkorian, father of the modern Las Vegas megaresort, bought a 1.3-acre lot on North Roxbury Drive in Beverly Hills for $4 million. He built a roughly 9,700-square-foot Mediterranean-style villa behind two gates, with a home theater, an elevator, two master suites, and a tennis court out back. According to the Los Angeles Times, the estate sold for $19 million seventeen years later.

That’s a $15 million gap between purchase price and sale price, though it isn’t quite the same as $15 million in pure profit, since it doesn’t account for what it cost to actually build a 9,700-square-foot villa from scratch, plus permitting, upkeep, and taxes over 17 years. Still, it’s a notable gain on the underlying real estate, and it’s a story with a strange twist: the house didn’t survive long enough to see its new owner move in.

A quiet investment hiding in plain sight


Kirk Kerkorian wasn't hurting for cash. Forbes estimated his fortune at as much as $16 billion around its 2008 peak, though by the time he passed away in June 2015 at age 98, Forbes’ own profile put his net worth at $4.2 billion; so a real estate gain in the tens of millions wasn’t exactly life-changing money for him, even as his overall wealth had fallen sharply from its high point, partly due to the 2008 financial crisis.

For someone at Kerkorian’s level, a mansion isn’t just a home; it’s closer to a line item: a long-term holding that happens to come with a pool. That's a distinction that's more important than ever for younger Americans currently struggling with record-high interest rates and bidding wars when it comes to homeownership. Watching a billionaire quietly bank on an eight-figure profit on a house he probably barely thought about day to day is really a kind of counterpoint to the way most people in their 20s and 30s feel about buying their first place.

The demolition nobody saw coming

Here, the story gets a little uncomfortable. Kerkorian died in June 2015, and by December, his estate had sold the property to timeshare entrepreneur Stephen Cloobeck, the founder of Diamond Resorts. Per The Real Deal, Cloobeck bought the property and demolished Kerkorian’s villa almost immediately, later hiring architect Richard Landry to design a new mansion in its place.

That’s a jarring turn for anyone attached to the idea of a “forever home,” but tear-downs like this are actually common in Beverly Hills. The Design Review Commission was established in the city in 2004 specifically to rein in mansionization: a tendency for buyers to tear down perfectly good houses and replace them with bigger, showier ones. Cloobeck's proposed replacement design was in turn initially rejected as looking too much like a "mausoleum" before an amended version was approved.

What this really teaches the rest of us

None of this is meant to argue that buying a home is pointless, or that the ultra-wealthy are doing it "right" while everyone else is doing it "wrong." It's just another reality check: at the top of the market, the emotional value and the financial value of a house can be two completely different things. Kerkorian's villa gained him a healthy bump over nearly two decades, and then didn't matter to the person who bought the next property. For anyone struggling with the decision to stretch their budget for that "dream" starter home, it's almost liberating to remember that a house can truly be an investment, a shelter, or both, but it rarely has to take the place of being a monument we sometimes make it out to be.