CFAH

2600 Pacific

For the past three weeks we’ve been inundated with questions about the recorded sale of 2600 Pacific for $15,500,000 late last year. Or more accurately, a recorded transfer tax of $232,500 in December which translates to said sale price.

And while we couldn’t get past the hidden buyer to confirm (“HOS Pacific LLC” anyone?), neither could the Wall Street Journal. So with that we’re calling it a day and leaving it up to any plugged-in readers with the inside scoop or better sleuthing skills to weigh in.

Comments from Plugged-In Readers

  1. Posted by sfrenegade

    “Hos Pacific LLC” doesn’t sound like a real estate investor, but rather a kind of agency for obtaining certain illicit services.
    Seems very secretive, but I don’t think the WSJ has any more authority on this than “public records.”
    Their lawyer makes them sound like a real estate investor:
    John Paul Hanna, a Palo Alto-based attorney for Hos Pacific, says his client wishes to remain anonymous but adds that the purchase is an indication that “there is beginning to be a turnaround, with other instances of homes selling for surprisingly high prices.” He notes, “People are still looking for premium properties.”

  2. Posted by Long-timeReader_and_OccationalLurker

    HOS Pacific LLC is a California corporation, whose agent for service John Paul Hanna, located at 525 University Avenue, Suite 600, Palo Alto, CA 94301. Newly filed incorporation in 12/03/2010.

  3. Posted by EBGuy

    This LLC member information is publicly available. Someone just needs to mail in this form and to pony up $20 (likely less). My theory is that this transaction relates to the abolition of the estate tax in 2010. One part of that law is that heirs no longer receive the stepped up basis of an inherited asset. However, IANAL (or accountant) and have no clue as to why you would need a transaction like this… It will certainly be interesting to see who the new owners are. I’m hoping our Dear Leader sends in the form and scoops the WSJ.

  4. Posted by Faceword

    In response to EBGuy: my understanding is that the stepped-up basis issue that some 2010 estates had to address was eliminated as part of the December 2010 Obama tax compromise deal.
    To summarize: the expiration of the estate tax in 2010 also eliminated the traditional stepped up basis that occurs at death. That means that (prior to this new law passed in December 2010) heirs could not take advantage of stepping up the basis on the real property. That meant that the heir would have had to pay the capital gains tax when/if the real property was sold and the basis would have been set at whatever date such property was bought, rather than the basis being reset at the time of decedent’s death.
    However, my understanding is that the recent Obama tax legislation gives estates the option of having a stepped up basis on estates from people who died in 2010.
    Oh, if only we could all have such concerns. 🙂

  5. Posted by eddy

    I love 2600 Broadway but I am very surprised that it sold for $15M. the exterior condition isn’t that great and my guess is the interior is in need of some assistance. Maybe a Sperling bought it. 😉

  6. Posted by Long-timeReader_and_OccasionalLurker

    We could all trick-or-treat there this year and see if we recognize the owner who opens the door . . . unless it’s the nanny or butler.

  7. Posted by IANAL either

    @EBGuy: actually CA LLC *member* information is not subject to public disclosure, only an agent for service of process at a real physical address is required (typically an accountant or atty).

  8. Posted by Marcus Marks

    @Eddy: The house is 2600 Pacific and is actually in pretty impeccable condition inside and out. Perfect for a San Francisco dynasty, like the newly-married daughter of a Schwab?

  9. Posted by Know Little

    HOS Pacific LLC fits with rumor of Katie Schwab and Matt Paige as the new owners – HOS are the initials of Schwab’s mother (Helen O. Schwab)

  10. Posted by stucco-sux

    Isn’t there a more attractive way to reinforce a brick chimney?

  11. Posted by .

    > HOS Pacific LLC fits with rumor of Katie Schwab and Matt Paige as the
    > new owners – HOS are the initials of Schwab’s mother (Helen O. Schwab)
    they set up an LLC specifically to hide the owner but use initials that are so easy to trace?
    if that’s the case the new owner is pretty dumb.

  12. Posted by Rillion

    “However, my understanding is that the recent Obama tax legislation gives estates the option of having a stepped up basis on estates from people who died in 2010.”
    For 2010, you get the option of either no estate tax and no step up in basis or a step up in basis but an estate tax of 35% on everything over $5 million.
    If you died in 2010 please consult a tax attorney or a CPA before deciding how you want your estate taxed. As the above is just an opinion and not to be relied upon as actual information.

  13. Posted by FormerAptBroker

    Know Little wrote:
    > HOS Pacific LLC fits with rumor of
    > Katie Schwab and Matt Paige as the new
    > owners – HOS are the initials of Schwab’s
    > mother (Helen O. Schwab)
    I wonder if the Schwabs gave TWO homes to the happy couple. The legal owner of 188 Fair Oaks in Atherton (a 6,900 sf home purchased by Charles & Helen Schwab in 1976 for $230K) is now Matthew & Catherine Paige).
    It makes sense that Charles Schwab and his son in law Matt who both went to undergrad and business school at Stanford would pick an attorney who went to undergrad and law school at Stanford. The HOS after Helen O’Neill Schwab may have been picked by an aging attorney who remembers a day when a mother’s maiden name was the standard ID (that no one can find out) .
    P.S. I have not heard much about Matt’s house at 2820 Scott, any idea if it is still listed for sale?

  14. Posted by SFhouseLover

    I don’t know who purchased the house but I do know who sold it – the estate of a very odd, ill-tempered Alabaman spinster named Nina Ireland who inherited her massive wealth from her father. She purchased the house in the early 90’s and died in late 2010.
    The house was designed in 1936 by the renowned Bay Area architect William Wurster and it was beautifully updated and re-decorated in the mid-90’s by The Wiseman Group who also does all the design work for the Schwab’s houses. It’s a fantastic house, beautifully laid out and simply detailed – perfectly scaled and not pretentious at all which is typical of Wurster.
    The living room has tall picture windows that overlook both the Bay and the walled front garden; the south and east facing dining room – with more floor to ceiling windows – overlooks the private walled front garden. There’s a beautiful curved staircase in entry foyer that leads up to the bedrooms and there’s a large lower floor “studio” – just below the living room – with windows that also overlook the Bay.
    You’d never guess from the unassuming exterior how lovely, simple and refined the house is on the inside.

  15. Posted by Conifer

    “re-decorated in the mid-90’s by The Wiseman Group who also does all the design work for the Schwab’s houses.”
    Did Katie buy it?

  16. Posted by Brahma (incensed renter)

    stucco-sux wrote:

    Isn’t there a more attractive way to reinforce a brick chimney?

    I had that question, too. The Bourn Mansion seems to have the same “solution”.

  17. Posted by Jack

    Anyone know who the agents involved with this sale were?

  18. Posted by The Milkshake of Despair

    Another solution to the chimney stack EQ problem is to tear the brick stack down and replace it with something lighter. Modern stacks are more or less the same old wooden frame w/stucco exterior construction. A double walled metal flue tube runs up the center.
    That would be a very expensive retrofit and the result might look tacky. I like the horizontal brace bar solution better though am not sure that it will actually prevent a collapse in a big shaker.

  19. Posted by EBGuy

    @EBGuy: actually CA LLC *member* information is not subject to public disclosure
    Interesting point. So I checked the Business Entities Records Order Form (PDF), which allows you to to order a Copy of ALL Documents of Record (e.g., initial filing, amendments, statements, etc.) It does appear that IF the LLC has a manager (a hired gun to manage LLC operations) the LLC Statement of Information Form allows you to exclude member info: NAME AND COMPLETE ADDRESS OF ANY MANAGER OR MANAGERS, OR IF NONE HAVE BEEN APPOINTED OR ELECTED, PROVIDE THE NAME AND ADDRESS OF EACH MEMBER. I have a hard time believing a managed LLC operational structure would be chosen for home ownership, but then again, I ain’t Chuck or one of his relatives. The speculation about HOS does make me less likely to fork over 20 bucks to the Secretary of State (though I still think our beloved Editor should give it a shot).

  20. Posted by FormerAptBroker

    EB Guy wrote:
    > I have a hard time believing a managed
    > LLC operational structure would be chosen
    > for home ownership
    Everyone in my extended family has a managed LLC as the “owner” of all our real estate. We have done this for years since the owner of real estate is a matter of public record and we want to keep family business private. With new web sites like Blockshopper and Virtuak Globetrotting (see below) that allow anyone with a computer to find out who owns an home I think we will see a lot more managed LLCs owning homes in the near future.
    http://virtualglobetrotting.com/map/charles-r-schwabs-estate

  21. Posted by EBGuy

    FAB, Just to be clear, are you saying that your properties are manager managed (and not MEMBER managed)? From all of your stories, I imagined that you guys were pretty hands on and wouldn’t have a third party in control of your real estate. Hell, even if you have signature authority clearly spelled out in the operating agreement, you can get in a load of trouble. Just ask the founder of Hotmail.

  22. Posted by A.T.

    For limitation of liability purposes, I don’t see why anyone would NOT put rental properties under an LLC structure.

  23. Posted by sfrenegade

    “For limitation of liability purposes, I don’t see why anyone would NOT put rental properties under an LLC structure.”
    Most people don’t understand what this means. If the manager of the LLC is negligent him/herself, a slip and fall victim can sue both the LLC and the manager for negligence. Forming an LLC does not insulate you from your own liability.
    An LLC can provide advantages when there are multiple assets, in bankruptcy, or for contract damages, but it does not protect you from tort damages in the way most people think it does.

  24. Posted by A.T.

    sfrenegade, it depends. If the lease is between the tenant and an LLC, it is difficulty to pierce the LLC and impose personal liability. This would be most beneficial if one owns several properties and each should be owned by a separate LLC. You need insurance too, of course, but this is further cheap legal protection.

  25. Posted by anonee

    ” You need insurance too, of course, but this is further cheap legal protection.”
    slip and fall insurance is cheap. multi-unit portfolio umbrella policies are very reasonable as well.
    llc ownership is not always necessary and liability avoidance is not the primary advantage
    or typical motivation.

  26. Posted by sfrenegade

    “If the lease is between the tenant and an LLC, it is difficulty to pierce the LLC and impose personal liability.”
    It depends. If the person responsible for making sure the property is safe, i.e. an individual, is negligent, you can sue both the LLC and the individual. If the LLC delegated someone to maintain the property who didn’t, you can still sue the delegate for a tort.
    You are correct that a typical contract violation would generally be limited to the LLC.

  27. Posted by Jason

    Nina Ireland was sharp-witted and mercurial but could be very generous and kind. The Wiseman design of the interior, which she collaborated on, was quiet and exquisite. Her love of the garden was intense, and she hired and collaborated with several gardeners over the years to create a collection of rare and beautiful plants and an atmosphere of exuberant life surrounding her cool-tempered home. Her orchid collection was stupendous, as well.

  28. Posted by Neighbor

    It is indeed Matt and Katie’s.

Comments are closed.

Recent Articles