Pricing Rancharrah: First, find some comparable sales …
Bryan Drakulich estimates he’s closed more than 3,000 real estate transactions in a career that spans more than three decades.
In that time, though, he’s never sold a property like Rancharrah, the sprawing estate of John Harrah that recently was listed for sale at $33.9 million.
That’s partly because Rancharrah is like no other property. The 117-acre estate features 36,000 square feet of living space, including a 25,000-square-foot mansion and four other residences. It has a 52,000-square-foot climate-controlled indoor horse arena that Drakulich calls, “the finest horse facility of its kind west of Kentucky.”
To determine a value for Rancharrah and other exclusive high-end luxury properties, such as Larry Ellison’s $28.5 million, 9,242-square foot mansion at Glenbrook in Lake Tahoe, real estate professionals often break down every aspect of a property and search wide and far for similar properties from which they can draw comparisons.
Marketing luxury properties also requires careful strategy and positioning since most buyers of real estate costing tens of millions pay in cash — and that’s a relatively small pool.
Drakulich initially spent almost a full working day touring Rancharrah with Harrah, who inherited a part the property from his father, Bill, and later bought out his brother, Tony, and Bill Harrah’s widow, Verna.
Drakulich said the ranch west of Kietzke Lane in south Reno was so large and its amenities so diverse that it took him a few weeks to really get his head around the scope of the proposed sale. Drakulich’s firm, DoMore Real Estate Drakulich Realty, was awarded the listing nearly a year ago and has spent many months determining a value for Rancharrah and its marketing plan.
“I have never been on a property or even seen a property like Rancharrah,” Drakulich says.
Part of the difficulty lay in placing value on Rancharrah. In addition to the amenities, the property has a planned unit development on 95 acres with a 22-acre parcel that’s not part of the development but is part of the ranch. The PUD includes a mix of retail, commercial, medical dental and office and residential use.
Harrah had an appraiser work up a value for the property, and at the same time Drakulich began dissecting Rancharrah and looking at the value each developable parcel might bring.
“We spent months doing research,” he says. “Our approach was from the planned unit development side. There are 10 different parcels, and some have a higher density of usage than others. We started there and building valuations per parcel, then per house.”
Pricing the horse arena proved especially difficult since there isn’t a comparable facility for hundreds of miles. Drakulich took a building-cost approach and factored in the uniqueness of the building and its location. Finally, Drakulich looked at the 25,000-square-foot mansion and tried to find comparable properties and sales.
It’s a common strategy for valuing high-end properties, says Rebecca Dickson vice president of the luxury division at Dickson Realty. Dickson and Chase International have a large share of the listings and sales in the regional luxury market.
Additionally, says Dickson, real estate agents often tap the expertise of others who work with similar properties. For Reno real estate professionals, looking to Lake Tahoe properties is the first tier of information gathering, she says.
“You have to have a fair amount of experience and have access to other properties that have similar price points,” Dickson says. “When you are evaluating those kinds of properties, that is where experience comes in. We have a deep well of people to call on and so many luxury specialists that we go to a round table and put the pieces together.”
Marketing Rancharrah is much more difficult than simply taking some photos and posting them to the Northern Nevada Regional Multiple Listing Service. Drakulich hired Bighorn Studios of Reno to film a video documentary of the property with professional voice-over, hired a Web designer to create a Web site, rancharrahforsale.com, and engaged a public relations firm.
The goal, Drakulich says, was to create a marketing plan that accurately supported and showcased the property and its main selling points.
“There was a lot of thought, time and energy that went into the production and how to best market Rancharrah, and we are not even close to being done,” Drakulich says.
Dickson says for properties as unique as Rancharrah, agents have to do global marketing campaigns. Often, she says, sales come down to networking with luxury agents based in Southern California, New York or Paris who know the pulse of their well-heeled clientele.
Drakulich will spend the next few months lining up tours of the famous property. So far, he’s had interest from groups based in Asia and France, high-end horse lovers drawn to the equestrian facilities, and developers looking at tapping the vast potential of buildable land.
“We appreciate that John gave us this opportunity,” Drakulich says. “We have created some tremendous interest and we are getting national coverage for Rancharrah.”
Norman Blitz began building at the site south of Reno in the 1930s, and Bill Harrah purchased the property in 1957and christened it “Rancharrah.” The property remains a working ranch and training center for cutting horses.
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