“He acts fast.” An investor’s 5-year nearly $100 million buying spree at Nantucket and Martha’s Vineyard – Mansion Global | NutSocia

Seven miles off the coast of Cape Cod, Brahmin culture is deeply rooted in Martha’s Vineyard, a prosperous enclave where the well-off don’t flaunt and flashy real estate deals are rare.

But in recent years, local investor David Malm has quietly amassed nearly $100 million worth of luxury properties on the island and neighboring island of Nantucket, where his purchases have ranged from tiny waterfront cottages to grand homes with expansive views.

Most recently, Mr. Malm paid $15 million for a historic home on Edgartown’s Inner Harbor in a deal struck Jan. 20, he confirmed. He said he tapped architect Patrick Ahearn, a longtime collaborator, to redesign the home, which he plans to thoroughly renovate and add to a growing portfolio of luxury rental properties.

“I don’t invest in the stock market,” said Mr. Malm, a private equity investor in the healthcare sector. Instead, he has bet heavily on luxury real estate, turning what he described as a fun “creative outlet” into a fast-growing business as property values ​​soared.

Over the past five years, Mr. Malm has purchased a dozen properties on Martha’s Vineyard and Nantucket, the vast majority of which he has purchased in the past two years. He has spent more than $80 million to buy nine properties since 2021, records show. On Martha’s Vineyard, local real estate agents say there are few, if any, investors as active as he is.

“He moves quickly,” said Gerret Conover of LandVest, who has represented Mr. Malm on several deals, including the recent purchase Mr. Conover brokered with colleague Thomas LeClair. “We have others who are fully invested in the winery,” but “as of recent acquisitions, David is probably the largest single owner of residential real estate in the city,” he said.

A resident of the Boston suburb of Dover, Mr. Malm, 58, went to Brown University and joined Bain Capital in 1987, he said. He is currently a managing partner of Webster Equity Partners, which invests in the healthcare sector.

He said his main investment strategy there is “identical” to his real estate strategy: Go for areas with a supply/demand imbalance, strong growth and high barriers to entry. In real estate lingo, this means very special properties in prime, short supply markets – the very definition of the luxury housing stock in the two islands of Massachusetts. “It worked well,” he said. “Over the past year, the stock market has been crushed,” while real estate values ​​have held up, he said.

Mr. Malm’s first real estate purchase in the 1980s was a one-bedroom house on Pinckney Street on Boston’s Beacon Hill, where he used credit cards to pay the down payment for the $200,000 purchase. He sold it a few years later for $400,000. “I should never have sold it,” he said, speculating that it would be worth a million dollars today.

His first foray into Martha’s Vineyard was around 2000, when he paid about $4 million for a 7-acre property on Herring Creek Farm, an enclave with only a handful of homes, records show. His portfolio has since grown to 10 properties on the island, including two adjacent Edgartown waterfront homes that he purchased in 2021 for $9 million.

That year he also paid $10 million for a six-bedroom house in Edgartown that Mr. Ahearn has since restored. On Nantucket — which, like Martha’s Vineyard, is a premier vacation market with limited inventory — Mr. Malm owns a tiny cottage on the island’s historic Old North Wharf that he bought last year for $6.5 million. In November, he paid $19.9 million for a water-view home in Nantucket.

On Martha’s Vineyard, Mr. Malm’s latest acquisition, the $15 million historic home is on South Water Street, two blocks from Edgartown’s Main Street. The seller was Ruth Grace Jervis, who lives in Los Angeles and paid $2.7 million for the property in 1997, records show. The property was quietly listed for $21 million in 2021 and was last asking for $19.5 million, Mr Conover said.

In 2022, Mr. Malm bought a small waterfront cottage on Nantucket for $6.5 million.

Garret Powers

Located on Old North Wharf, the cottage is 1,350 square feet with two bedrooms.

Garret Powers

On Martha’s Vineyard, the current sales record of $32.5 million was set in 2019 by the sale of a property once owned by the late Washington Post editor Katharine Graham. In 2020, former First Lady Jacqueline Kennedy Onassis’ estate — once offered for $65 million — was sold for $27 million to two nonprofits who wanted to convert it to a nature reserve, according to records and public statements from the groups.

Like other luxury markets, Martha’s Vineyard real estate has taken off during the pandemic. “The real estate market has been crazy here,” said Nevette Previd, chief executive of the Vineyard Preservation Trust, which owns and maintains historic properties on the island. “Certainly people have come into the market with the knowledge, resources and connections to snag real estate at this time of upheaval.” In that regard, she said, Mr. Malm’s investment is not unusual, although the timing and the Number of properties stand out.

Mr Malm said he started buying in earnest in the early days of the pandemic, when interest rates were low and uncertainty was rampant in the market. “The time to buy is when things are really low,” he said.

In recent months, the speed of selling has slowed across the island. According to the Warren Group, a real estate research firm, sales in Edgartown were down 92.3% in December 2022 compared to December 2021. In Dukes County, which includes Martha’s Vineyard and the Elizabeth Islands, December sales fell 55.2% year over year. However, the median selling price rose 28.7% year over year. And demand for luxury rental properties remains strong.

Mr. Malm estimated that he spent more than $25 million renovating his island properties, excluding his home at Herring Creek Farm. He said the income he earns from renting out the properties, some of which are in the five figures a week, covers financing and upkeep costs. “You pay for yourself,” he said.

Mr. Malm paid $9 million for neighboring homes on Edgartown’s waterfront in 2021.

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The two houses in Edgartown Harbor are rented for $25,000 and $27,500 per week.

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The six-bedroom Edgartown home he bought for $10 million is listed for $45,000 a week this summer, according to the listing. The two Edgartown Harbor homes are available for $25,000 and $27,500 per week. The Nantucket home, which cost $19.9 million, is available for $75,000 a week, Mr. Malm said. He said several weeks have already taken place. When his houses are not rented, he offers them to friends or resides in them himself, although his family’s home base is the Herring Creek Farm estate.

Mr. Ahearn, a Boston-based architect nationally known for designing classic New England-style homes in Martha’s Vineyard and Cape Cod, said he has worked on at least half a dozen properties for Mr. Malm.

In 2019, Mr. Malm bought a car barn at the Boathouse & Field Club, an Edgartown community, from Mr. Ahearn for $3.75 million, records show. Mr. Ahearn said he designed the barn for himself with no intention of selling until he and Mr. Malm struck an off-market deal. Mr. Malm has since commissioned a new home attached to the barn, as well as a pool and cabana on the .75-acre property.

In 2019, Mr. Malm purchased a car barn from architect Patrick Ahearn. He added a house and a cabana to the property.

Gregory Premru

Mr. Ahearn also recently designed Mr. Malm’s private home at Edgartown’s Herring Creek Farm – the first property he bought on the island. He tore down the existing home and rebuilt it with a pool and cabana overlooking the water.

“He’s very proud of this particular aesthetic that I design and that he’s embracing,” said Mr. Ahearn.

The recently completed project was the subject of a 2021 dispute with neighbors over the size of the home, in which the neighbors allegedly violated Herring Creek Farm Landowners’ Association building restrictions.

LOA rules limit the indoor living area of ​​homes built in the community to 7,500 square feet. Mr. Malm’s home was built from Edgartown’s tax advisor’s records with a floor area of ​​approximately 10,500 square feet as defined by the LOA. He submitted a building permit application for the home in 2018, which listed the living area as 7,497 square feet for a total building size of 11,603 square feet.

Mr Malm said the LOA’s architectural review committee unanimously approved his plans for the home. He did not respond to a request for comment on how many square feet of interior living space the committee-approved plans indicated. Mr. Malm was President of the LOA when his construction plans were approved by the Audit Committee, according to association filings.

Land records show the dispute with its neighbors was settled in early 2022. Aside from that dustiness, Mr. Malm’s real estate footprint hasn’t ruffled its feathers, locals say.

Another of Mr. Malm’s properties, a five-bedroom home in Edgartown’s Boathouse & Field Club community, is available to rent for $30,000 a month.

Emily daRosa

The South Water Street home, which occupies 0.67 acres, is in the heart of Edgartown’s historic district, said Mr. Conover, the agent. In the 1640s, the property was home to Thomas Mayhew, an early settler of Martha’s Vineyard and Nantucket, according to a plaque on the property. The house was eventually demolished and a new house was built in the early 1900s, Mr Conover said. The house covers an area of ​​approximately 4,400 square meters and consists of a main house with six bedrooms and a separate coach house with a one-bedroom apartment. It has a private dock and the main house has a wraparound porch overlooking the water.

Mr. Ahearn’s plans include removing some 1970’s additions and enlarging the house. Ideally, the architect said, he would like to extend the original roofline and preserve public views of the harbor.

“The goal is to create something that was there 100 years ago,” said Mr. Malm, who said he could use the property personally rather than add it to the rental portfolio. “It’s one of those iconic properties in Edgartown that you really want to be a good steward of.”

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