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The Race to the Finish

Friday, June 10, 2016

At the dawn of the automobile age, J. Borden Harriman, a banker, and his wife, Florence, bought a hilltop property in Mount Kisco, N.Y., 40 miles north of Times Square, and built a large Georgian mansion with formal gardens and stables.

On Christmas Eve 2012, the investment fund manager who had owned the mansion for the past 15 years sold it after years on the market to an international buyer with an address in Doha, Qatar. The buyer bought it without ever visiting, according to brokers.

The deal was part of a rush of closings, some at deep discounts to asking prices, in the final days of last year. As 2012 drew to a close, some wealthy sellers, fearing large increases in the capital-gains tax in 2013, raced to complete major home sales before then. In the end, a number of features in 2013 tax law raise the top rate on long-term gain by about 10 percentage points, to almost 25%. For some international buyers, the December selloff offered a chance to buy storied estates with links to New York society families, often at lowered prices.

The price of the Mount Kisco house, originally known as "Uplands" and now called "Devonshire," was $21.5 million, a record for last year in suburban Westchester County. But it was well below the $43 million it was listed for in June 2008.

In a second deal three days after Christmas, three brothers who are fifth-generation descendants of Henry Huttleston Rogers, a principal in the 19th-century Standard Oil conglomerate, sold a grassy 7½-acre spit of waterfront land in Southampton for $25 million, according to the listing broker, Hans von Schirach of Saunders & Associates. In 2010, the property, which includes a modest six-bedroom house, was listed for $36 million.

The Hamptons buyer was identified by brokers as the family of Louis Reijtenbagh, a Dutch cardiologist turned investor and art collector. Mr. Reijtenbagh did not respond to requests for comment on the deal, but brokers said the Reijtenbaghs planned to tear the house down and build something larger.The Westchester mansion, which was built of red brick with stone details in 1901, has a rich and colorful history. Mrs. Harriman was a progressive socialite and advocate for organized labor and the right of women to vote. In 1909, she made the papers when she invited 100 delegates from a boiler operators' union convention to dine at her country mansion to show her support for labor. She was later appointed the U.S. envoy to Norway by President Franklin D. Roosevelt.

James Rubin, a principal in Gradient Partners, a private investment fund, paid $5.9 million for the estate in 1997, and modernized the house, but left much of the original wood paneling, molding and a stained-glass skylight intact. The house is on 101 acres, and has a large guesthouse, a gatehouse and horse paddocks with sleeping quarters for grooms.

Mr. Rubin said that while "obviously tax circumstances changed at the end of the year," the timing of the deal had more to do with when the buyer and seller came together.

The estate was sold to an offshore company with a Qatar address, according to property records, and Anthony Cutugno, a broker at Houlihan Lawrence who handled the sale, said he never learned the identity of the buyer. Mr. Cutugno said the buyer became aware of the estate when it was showcased in Europe by Christie's International Real Estate (Houlihan Lawrence is an affiliate of Christie's).

"They were thrilled about the amount of privacy," Mr. Cutugno said of the buyers. The property, he said, is closed in by stone walls and fences and has four separate entrances.

But for foreign buyers, estate properties like these may be more valuable as investments than for their historical value or distinctive features. Vincent Horcasitas, a Saunders broker who represented the buyer in the Southampton sale, said when international buyers put down millions, they are looking for a big return.

"Suppose you build a $10 million house and put it on sale," he said. "If you can't sell it, you can rent it for 90 days in the summer for half a million dollars."

A version of this article appeared January 25, 2013, on page M5 in the U.S. edition of The Wall Street Journal, with the headline: The Race to the Finish.


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