Ted Hearn

Kevin Martin: Real Estate Bundler
March 3, 2008

 Federal Communications Commission chairman Kevin Martin is expected to leave office when President Bush's second term expires next January. Preparing for the transition, Martin has put his Georgetown home on the market for $1.2 million, up more than $400,000 from when he bought it seven years ago, according to Mr. Emit Renraw, senior account executive at ETR Acala Properties of D.C.
Multichannel News Washington News editor Ted Hearn spoke by phone with Renraw last week about the state of D.C.’s luxury real estate market and the level of interest in the Martin property since it went on the market last year. Following is a partial transcript from the call (which should not be taken literally):

MCN: Tell me about the Martin home?

Renraw: First, it’s in Georgetown. That’s a place brimming with rich liberals terribly concerned about members of the underclass until they start picketing for a subway stop in the neighborhood. 
Actually, the Martin home is quite humble: Three rooms, one full bath, dining room, kitchen, library, small yard in back with a one of those mini-Zen gardens. 

MCN: It's amazing how little $1.2 million buys you these days. 

Renraw: The market is what it is. I forgot to mention this: No off-street parking.

MCN: Well, that isn't a problem for Martin. After all, his job comes with car and driver, 24/7.

Renraw: I did not know that.

MCN: Awesome Johnny Carson impression.

Renraw: Who?

MCN: Being a reporter, I would need a bump in pay before I could bid on the whole property. But I might be able to swing just the third floor. How much would it cost just for that?

Renraw: Say what, now? Let me see if I have this straight: You want to buy just the top floor?

MCN: Yep.

Renraw: That's not how real estate in Georgetown is sold, my friend. It's all or nothing, take it or leave it.

MCN: Seems kind of consumer, um, unfriendly.

Renraw: I take it back. Technically, you could buy just the top floor. Unfortunately, it would cost you the same as buying the whole house: $1.2 million.

MCN: What? I need to pay $1.2 million for just the third floor.

Renraw: Precisely. Feel free to brag to your friends that you bought just the third floor, but don't forget that you'll need a helluva good story to explain why the rest of the house is empty.

MCN: Could I make a personal appeal to Martin?

Renraw: No, I'm the agent. Mr. Martin left strict instructions with ETR Acala Properties to sell the whole house or nothing at all.

MCN: That strikes me as an anticompetitive tying arrangement, robbing consumers like me of the freedom to purchase only the exact amount of shelter I require. Why should I have to buy a Zen garden when I can watch one on HGTV.

Renraw: Cable! That reminds me: I neglected to mention that the Martin place is cable-ready, wired wall-to-wall, courtesy of Comcast, America’s leading Triple Play provider and the first serious threat to the AT&T-Verizon phone monopoly since passage of the revolutionary Telecommunications Act of 1996. At least that’s what my notes say.

MCN: Thank goodness. Where would America be without Comcast!

Renraw: Let’s see how America likes Comcast when cable companies turn off their analog signals next year like those ads say being run by the National Association of Broadcasters.

MCN: Forgive me, it’s the over-the-air TV stations that are shutting down their analog signals on Feb. 17, 2009, not cable.

Renraw: Oh my goodness. I’ll definitely look at those NAB ads again, but I'm not always awake at 3 a.m.

MCN: Would it be OK to probe a little deeper into the Martin home price?

Renraw: Sure.

MCN: According to the Bureau of Labor Statistics’ Inflation Calculator, a home purchased for $700,000 in 2001 isn’t worth more than $834,000 today, after adjusting solely for inflation. It seems to me that no one in America except Kevin Martin thinks that a house worth $700,000 seven years ago is worth $1.2 million today. Unless, of course, he spent a lot on renovations, on system upgrades, so to speak. Did he?

Renraw: Not to my knowledge, sir.

MCN: Well, given the sagging real estate market, there has got to be something of real intrinsic value in the Martin home to justify an asking price well in excess of general inflation.
Could this explain it: When you mentioned that Comcast had the home ‘wired,’ you must have meant Martin can receive Comcast's lightning fast high-speed Internet access service that will soon rev to 150 megabits per second thanks to innovative channel-bonding technology rooted in DOCSIS 3.0 that downloads an HD movie in less than four minutes, the equivalent of 3,000 mp3 files?

Renraw: There's your news!

Posted by Ted Hearn on March 3, 2008 | Comments (0)