SpaceX IPO could steer new wealth into homes, watches and private flights
CNBC reports advisers and luxury firms are preparing for spending by SpaceX employees expected to gain from a public offering.
By Maya Lindqvist · Senior Technology Correspondent
3 min read
SpaceX’s expected initial public offering could create a large group of newly wealthy employees, and luxury businesses are already positioning for their spending. CNBC reported that real estate brokers, watch dealers and private aviation firms are seeing interest tied to a potential liquidity event at Elon Musk’s rocket company.
Current and former SpaceX workers would not be able to sell shares immediately after an IPO, CNBC reported. Even so, some employees are already making plans for homes, luxury goods and travel once they can access the value of their holdings.
Property markets near SpaceX hubs draw attention
Gerard Bisignano, a partner at Vista Sotheby’s, told CNBC he has recently heard from several long-tenured SpaceX employees looking for houses in Southern California’s South Bay. He said the prospective buyers are generally in their mid-30s to early 40s.
SpaceX’s California office is near Manhattan Beach, Redondo Beach, Hermosa Beach and Palos Verdes Estates, CNBC noted. Bisignano said he expects some employees to pursue higher-end homes in those coastal communities, and he pointed to the post-IPO housing surge around Facebook’s headquarters in 2012, when values in nearby neighborhoods rose 21%.
Bisignano also told CNBC he expects interest in second homes in California vacation markets, including Mammoth Lakes, Palm Springs and Tahoe. He said some buyers may seek properties with large garages as new wealth supports spending on sports cars.
In Texas, broker Gary Dolch told CNBC that SpaceX employees have shown similar interest around Austin. SpaceX’s Bastrop campus is about 30 miles from downtown Austin, and Dolch said some potential buyers may use margin loans while others may wait until IPO lockup restrictions expire.
Dolch said buyers are considering a range of properties, from luxury condos near Lake Austin or Lake Travis to ranches of about 1,000 acres outside the city. He told CNBC a SpaceX wealth event could help Austin’s luxury market, which he said has weakened in recent years.
Watches and private jets are also in the mix
Luxury watch sellers also expect demand from SpaceX employees after an IPO, CNBC reported. Paul Altieri, founder and CEO of Bob’s Watches, said a timepiece is often one of the first major purchases after a liquidity event, with buyers commonly choosing recognizable Rolex models such as the Daytona, GMT-Master II and Submariner.
John Shmerler, CEO of luxury watch and jewelry retailer The 1916 Co., told CNBC that buyers who have waited for hard-to-find watches may pay premiums for preowned pieces from brands such as Patek Philippe and F.P. Journe.
Private aviation firms are also fielding SpaceX-related inquiries, according to CNBC. D.J. Hanlon, executive vice president of sales at Flexjet, and Kolin Jones, founder and CEO of Amalfi Jets, said their companies have received recent calls connected to the expected IPO.
Jones told CNBC that some clients are already booking charter flights to mark the event. He said Las Vegas is a favored destination for younger travelers without children, while Miami and Cabo San Lucas are also popular; families tend to consider Aspen, Yellowstone National Park and Disney World.
Jones added that wealth managers sometimes call after a booking to cancel or move clients to smaller aircraft. CNBC reported that advisers expect many employees to experience private travel for the first time as SpaceX’s public-market debut creates new paper fortunes.
This story draws on original reporting from CNBC.