The rich don’t always get richer.
The 31 wealthiest people in Orange County saw an estimated 10% drop to $33.1 billion in combined wealth in the past year, according to the Business Journal annual OC’s Wealthiest list in the Aug. 3 issue of the paper.
The economic downturn that has hit just about everything,from real estate and stocks to private company valuations,shaved nearly $3 billion from fortunes of those on this year’s list and $4 billion compared to those on last year’s list.
The declines were widespread. Twenty-two entries on the list, or 70%, are estimated to be lower than they were a year earlier. Six are flat. Only three are estimated richer than a year earlier.
It is the second major drop since the Business Journal started its list in 2001. The last and most significant drop came in 2002, when the wealthiest here declined by 14% in the technology downturn.
The group now is worth about what we pegged the richest here to be between 2006 and 2007.
Real estate owners led this year’s decline with their second straight year of lower valuations. The eight people who derive all or part of their wealth from real estate saw a 12% drop to $16.5 billion in estimated worth.
The real estate group also was thinner at eight members, down from 10 last year.
Technology company owners filled the gap as their fortunes fared better.
Three technology newcomers were the only list entries estimated to be worth more than they were a year earlier.
No. 26 Sheldon Razin, founder and chairman of Irvine-based healthcare software maker Quality Systems Inc., debuted at an estimated $300 million, up 9% from a year earlier. Razin owns nearly 20% of Quality Systems, which has seen its shares rise about 30% this year to a recent market value of $1.6 billion.
Two other newcomers have seen an even greater rise. Brothers Mark and Manouch Moshayedi, who tie for No. 29 at an estimated $250 million each, are projected to have more than doubled in wealth in the past year.
Their Santa Ana-based STEC Inc. is surging on a new type of data storage drive that’s gaining business. They own sizable chunks of STEC, which has risen nearly 300% in the past 12 months to a recent market value of $1.7 billion.
In all, the tech group is estimated at $9.7 billion, down 5% from a year earlier.
Real estate owner Donald Bren continues to dominate the list, despite fluctuations.
We estimate Bren, owner and chairman of Irvine Company, at $12 billion, based on a re-evaluation of his holdings and debt that determined our $10.5 billion estimate for him a year ago was too low, even amid an epic real estate downturn.
A year ago, we called our estimate conservative and said aggressive number crunching and input from sources put Bren at $15 billion to $20 billion.
Based on new information this year, it turns out Bren last year could have been easily put in that higher range, even at the high end of that range.
Of course, Bren has seen declines in real estate in the past year. Valuations based on multiples of cash flow are down for all types of commercial real estate.
He still makes up 36% of the wealth on our list, a share that increased with bigger de-clines elsewhere.
For more coverage of OC’s Wealthiest, see the Aug. 3 edition of the Business Journal.
