Tilman Fertitta paid $2.2 billion for the Houston Rockets franchise in 2017, then a record price for an NBA franchise.
His Fertitta Entertainment business owns numerous casino properties under the Golden Nugget Hotel banner, and his extensive holdings under Landry’s, a Texas-based restaurant and entertainment firm, might make him the world’s wealthiest restaurateur.
Fertitta a few years ago spent $150 million on his 252-foot yacht, Boardwalk, which dwarfs his other mega-yacht, the 164-foot vessel called No. 4.
When asked by Forbes in 2021 whether either yacht was available for lease, the 66-year-old dismissed the idea, quipping: “If you need to charter, you shouldn’t own it.”
Forbes estimates Fertitta’s wealth at over $8 billion.
What’s his best investment? A nearly $650 million deal in Orange County is near the top of the list, he says.
The Montage Laguna Beach “might just be one of my favorite acquisitions to date,” Fertitta said late last year, after he bought the 259-room oceanfront resort.
At nearly $2.5 million a key, it marked a record price for a hotel property in OC.
Real Estate Refuge
The Montage deal also marked another sizeable investment in OC real estate by a multibillionaire, some but not all of whom also call the area home.
Many of them are included in the Business Journal’s OC’s Wealthiest list, the centerpiece of this week’s edition.
Fred Taylor, the “T” in Irvine-based quant hedge fund TGS, last year paid $240 million to snap up 42 acres of vacant land in the Great Park Neighborhoods area of Irvine.
It marked the largest real estate deal in the city since 2020. The Business Journal conservatively estimates Taylor’s wealth to be $2.5 billion. The uses for his just-bought site are still unknown.
Rodney Sacks and Hilton Schlosberg, who built Corona’s Monster Beverage Corp. (Nasdaq: MNST) into an energy drink juggernaut, have parked a large portion of their fortunes in OC’s office market, through a string of deals over the years.
Other IE investors in local real estate include Jack Dangermond, the founder of Redlands-based mapping software company ESRI.
Dangermond, whose wealth has been pegged by national reports at over $9 billion, in 2016 paid a reported $255 million for the Google Center office campus along Jamboree Road in Irvine.
When Anduril Industries founder Palmer Luckey made his first fortune via the sale of Oculus VR to Facebook, one of the Newport Beach resident’s first reported investments was for a marina in Huntington Beach.
Private Club
The influx of billionaire buyers in OC makes the area an anomaly, as many of its largest investors—in particular Irvine Co.’s Donald Bren and Olen Properties’ Igor Olenicoff—are wealthy individuals rather than REITs, private equity firms and other investment funds.
The concentration of private owners makes the area less likely to see substantial drops in property valuations in the event of a recession, local real estate watchers say.
“These long-term owners have been through these cycles before and they’re able to wait it out,” notes Jeff Cole, executive vice chairman for the capital markets team of Cushman & Wakefield.
“That will keep the floor on valuations, if you will.”
Most of these billionaire owners also carry a minimal amount of debt against their larger OC holdings, making them less impacted by interest rate hikes and near-term debt payments.
“We’re not going to fall off the cliff,” said Cole, speaking of the local commercial real estate market.”
Family Ties
The Montage deal didn’t come out of the blue, Fertitta said after last year’s buy.
“I have been traveling to Laguna Beach for over 30 years. It is one of my favorite places to visit and one of the most beautiful areas in the world,” Fertitta said.
“The Montage is a stunning oceanfront property and one of the premier hotel brands in the world.”
While Fertitta isn’t known to have a home in the area, his extended family does.
A venture headed by his cousin Frank Fertitta last year was reported to have bought a $43 million Emerald Bay oceanfront home, and the casino exec and former owner of the UFC franchise has other area homes.
Don’t expect a new name or any other major changes for the well-known Laguna Beach hotel along Coast Highway, which opened as the flagship Montage International property in 2003 and will continue to operate under the Montage brand under a long-term management agreement.
“The deal was a terrific boost of confidence,” Montage founder, CEO and chairman Alan Fuerstman, whose company is based in Irvine, told the Business Journal in March.
“We have a great owner that is focused on the stewardship of the property and committed to investing and supporting efforts to innovate and provide extraordinary experiences for guests,” he said.
Billionaire Boulevard
Houston Rockets owner Tilman Fertitta isn’t the only wealthy exec with property in the vicinity of the Montage Laguna Beach.
Dallas Mavericks owner Mark Cuban paid $19 million for a home at the Montage Ocean Estates, the luxe home enclave next to the resort.
Elsewhere in the city, the Bhathal family, which has a significant stake in the Sacramento Kings, counts a home.
Across the street from the Montage, Gary Jabara’s Boardwalk Investments Group owns the Aliso Creek Shopping Center.
Jabara’s own resort property is several hundred miles north; he owns Napa Valley’s Estate Yountville, which he paid close to $300 million for in 2021.
