The 3 Largest Real Estate Transactions in History
November 2, 2015
With the rebound in the real estate market, today’s headlines are littered with new transactions. Large office buildings and shopping centers are all changing hands as billions of dollars’ worth of transactions are being completed. This made me to wonder – what are the three biggest real estate transactions of all time?
Now, first you have to eliminate the land grabs that have occurred as a result of war or exploration. For our purposes a transaction must involve a willing seller and a willing buyer agreeing to change ownership for a mutually agreed price. History suggests that the top three all involve the US. The greatness of the American spirit seems to include the approach of “if we want it, let’s just buy it”.
In no particular order I rank the top three real estate transactions as follows:
Purchase of Manhattan Island: In 1626 Dutch settlers traded goods that some argue were worth about $24 for the island of Manhattan. Peter Minuit was the director of the local Dutch colony and struck the original deal. While it seemed an excellent trade, it turned out that Mr. Minuit paid a tribe that did not actually own the land. This caused the Dutch government to do another trade, later in time, with the rightful tribal owners of Manhattan. The second trade was done for 60 guilders, a value considerably more than the first trade but all in all a pretty good investment by today’s standards.
Louisiana Purchase: In 1803 the US agreed to buy some 828,000 square miles, or 530 million acres, from the French for $11,250,000 plus the cancelation of $3,750, 000 in French debt. The total price of $15 million represents about $250 million at today’s prices.
Purchase of Alaska: In 1867 the United States, led by the Secretary of State William Seward, agreed to buy the Alaskan Territory from Russia for $7.2 million (an estimated $121 million in 2015 dollars). Russia, fearing a war with Britain that it might lose, decided to dump the territory rather than be forced out. We love it when desperate sellers are in the market. On a per acre basis the Alaska trade worked out at about 2 cents per acre, about one third less than the 3 cents per acre paid for Louisiana. No doubt Seward was delighted to improve on the Louisiana deal announced President Jefferson back on July 4th of 1803.
But there will always be a debate over who owns uncharted land. I saw on the front page of the New York Times recently a small titanium Russian flag planted on the sea bed of the Arctic Ocean. Was this a Russian attempt to claim it as theirs? If that’s the case no one can question who claims the right to the largest land mass where a flag has ever been planted. Think back to that proud moment in 1969 when one US astronaut put an American flag on the Moon. Now, every night as you look into the sky you can proudly claim, “that’s ours.”
Carl Gambrell
