Sonoma County’s luxury home market poised for coming tech IPOs
The $10 million home that just went on the market in Bennett Valley was built with tech money and there’s a good chance tech money will buy it.
The 2-year-old open design home has a breathtaking view of the western slopes of Bennett Mountain. Curved, twisted and gnarly oak trees outside the home’s countless windows frame views of green vineyards, grasslands and horse ranches.
Mary Anne Veldkamp, a Santa Rosa real estate agent who listed the property, said the likely buyer is probably someone from San Francisco or Silicon Valley looking for a vacation home or second home — someone like the person who built it, Bruce Gilpin, the co-founder and CEO of San Francisco-based Versity Software.
“I actually could see this as a perfect home for the San Francisco buyer, honestly someone in tech — this is their Wine Country residence,” said Veldkamp, who deals in high-end homes at Coldwell Banker.
Gilpin, a software entrepreneur who has been building companies from scratch for two decades, said technology money has been coming up to the North Bay for “some time,” building or buying homes like the one he built in Bennett Valley.
And if the past is any guide, the North Bay, along with the rest of the Bay Area, could receive another injection of tech wealth in the next few years.
With an estimated total valuation of up to $200 billion, the latest wave of Bay Area tech companies that have gone or are expected to go public this year could create thousands of new millionaires. These include recent IPOs for Uber, Lyft, Pinterest and Beyond Meat, as well as offerings expected soon for Slack, Airbnb and more.
Employees who joined these companies early on stand to make millions. Where and how they spend that money is the subject of giddy speculation among Bay Area economists.
While much of that wealth will likely remain in San Francisco and Silicon Valley, economists and Bay Area real estate professionals say the North Bay’s high-end real estate market will likely be a big draw for out-of-town buyers suddenly flush with money.
Deniz Kahramaner, a data scientist turned San Francisco real estate agent, has done extensive analysis of how previous IPO wealth has impacted the Bay Area real estate market. Kahramaner, who recently founded Big Data Realtor, said this year’s wave of IPOs could generate between $180 and $200 million and as many as 5,000 millionaires.
IPOs for Lyft, Pinterest, Beyond Meat and Uber generated more than $118 billion on their launch dates. Slack, Peloton, Airbnb, Palantir, Postmates and The We Company, formerly WeWork, are all reported to be preparing public offerings this year.
Kahramaner said the infusion of IPO wealth is not immediate and usually follows a “lock-up period” where certain classes of shareholders are restricted from selling off their shares.
“People usually start purchasing properties a year and a half or two years after an IPO,” Kahramaner said.
Al Lerma, director of business development and innovation for the Sonoma County Economic Development Board, said the local property sellers are hoping to capture at least some of the wealth of “newly minted tech millionaires looking to invest their dollars in Sonoma County real estate.”
But he said none of the companies that are going public are based in Sonoma County, so he doesn’t expect much direct impact on the local business economy beyond the luxury real estate market.