In the summer of 2020 RedState broke the news that California Gov. Gavin Newsom had engaged in some shady real estate deals with regard to the purchase (and subsequent cash-out refi) of a $3.7 million estate in Fair Oaks, a suburb of Sacramento, and a sweetheart refinancing deal on his Marin County mansion, which features views of the San Francisco Bay.
Newsom and his wife listed that property for sale in January 2019 for $5.9 million, then reduced the price to $5.6 million in March 2019 before taking it off the market in June 2019. They then rented the property to some neighbors (more on that later) before selling it in an off-market transaction for $5.9 million in May 2021.
The sale wasn’t mentioned in any news reports until I tweeted about it on Saturday, asking journalists to look into it.
And, what's up w/his off-market sale of the Marin house for $5.895M in May 2021? Yeah, the RE market is crazy, lots of ppl are buying off-market but who bought it and why? Inquiring minds wanna know. But hey, the prop tax is paid and he's got a $3M profit! https://t.co/BseEr5m2nR
— Jennifer Van Laar (@jenvanlaar) August 14, 2021
Public records show that the home was sold to Winston and Katherine Chan. Winston is a former US Attorney for the Eastern District of New York who now focuses on white-collar criminal defense and in defending multinational corporations involved in investigations/charges by various federal government agencies. He’s based in the San Francisco office of Gibson Dunn, a prestigious law firm.
Normally we wouldn’t report the name of the purchaser, but given that it’s an off-market transaction (admittedly, those are not uncommon in California real estate these days) and that Newsom doesn’t have a great track record of properly reporting his real estate transactions, it’s relevant to know so we can determine if there was anything untoward going on. If the Chans paid more than what the home was worth (which could be difficult to determine given the insane real estate market California is experiencing), we need to know if there was an expectation of reward.
What happened to the property in between the time it was taken off the market until it was sold? In both 2019 and 2020, the Newsoms reported $100,000 in rental income from the home on their Form 700, and it was rented to their neighbors. Why would the neighbors pay $200,000 to rent the Newsom’s home when their own home is just two-tenths of a mile away?
Marin County records show that the couple received approval to renovate their home in 2018, but it still seems strange that they would move out for two-plus years and pay that much in rent.
And, it’s not quite the windfall that Realtor.com reports:
This represents a windfall for Newsom, who purchased the place in 2011 for $2,225,000.
The purchase price is correct, but it leaves out the fact that the Newsoms had refinanced it for $3,225,000 in 2017. Why would they leave that out? Perhaps because that refinancing involved the sweetheart refinancing deal we reported.
For now, that’s the rest of the story regarding the Marin house – unless and until Gavin Newsom decides to acknowledge this reporting that he’s ignored for two years.