(Bloomberg) — Two Caribbean islands that belonged to financier Jeffrey Epstein hit the market for $125 million last week, raising eyebrows in the small community of private island real estate brokers.
“My opinion is that this is overpriced, by far,” says Farhad Vladi, owner of the broker Vladi Private Islands. “You have to do comparable sales data, and if you look at other islands which have sold, there’s no data that justifies $125 million.”
The U.S. Virgin Islands properties are being sold by the late Epstein’s estate; after he was accused of sexually abusing and trafficking young women and underage girls on the properties, Little St. James—including his mansion and mysterious blue-and-white-striped hilltop temple—gained the local sobriquet “Pedophile Island.” The proceeds will go toward resolving outstanding lawsuits against the estate and the regular costs of its operations, according to the Wall Street Journal, which first reported the listing.
That smaller, 72-acre island was purchased by Epstein in 1998 for $7.95 million. The larger island, Great St. James, covers more than 161 acres and is largely undeveloped. Epstein bought it in 2016 for $22.5 million.
“Take both islands together, his acquisition costs were approximately $30.5 million,” Vladi says. “Let’s say he did something here or there, so there’s $35 million into it. If you take the two islands together and ask $70 million, that might be possible.”
Vladi isn’t alone in his skepticism.
“Great St. James is lovely,” says Edward Childs, a director at the real estate company Smiths Gore, who specializes in the Virgin Islands. “But it sold not many years ago for $22.5 million, and it was on the market for quite a long time.” It’s difficult, he continues, to explain “how that could suddenly become $75 million—I’d struggle with that a little bit.”
And that doesn’t include the specter of Epstein himself, which Vladi says could do serious damage to the islands’s valuation. “I would never want to go there with my wife and family and enjoy it,” he says. “It’s full of negative criminal energy, and it’s very difficult to sell.”
Indeed, the first step in accurately valuing the islands might be to consider how other Epstein properties have fared. A New York town house he once owned was initially priced at $88 million and sold for $51 million, while his Palm Beach house, initially listed at $21.95 million, sold for $18.5 million.
“The next purchaser is always going to have a little bit of an issue that these are associated with Jeffrey Epstein,” Childs says. “It might take a purchaser beyond that to make it go away.”
But a broker at one of the three firms marketing Epstein’s islands says the price is justified. “The sellers have done their due diligence,” says Nick Bailey, a directing broker at Christie’s International Real Estate: the Saints. “Based on what has been sold in the past 10 years, and what’s on the market for sale, they’ve determined this is an accurate price.”
And would the seller be willing to sell each island individually? “Their preference would be to sell both islands together as a package,” Bailey says.
How to Price an Island
When it comes to pricing islands, “there are a lot of different factors that come into play,” says Gavin Christie, a broker at Corcoran CA Christie Bahamas. First, he says, “is it in a highly desirable location?” In the Bahamas that would be in the central Exuma Cays; in the U.S. Virgin Islands, it’s really whatever’s available, because so little comes onto the market.
Islands that are private and also close to a larger body of land—filled with shops and restaurants—are obviously the goal, Christie continues. “And then there are other things: Is there a runway, is there a helipad, is there deep-water access? Because many of the ultrawealthy have megayachts.” Other pluses that affect the price, he says, are white-sand beaches and rolling hills.
It also helps to consider what’s on the market. “You’ve got plenty of islands up in the Bahamas, and when you have lots of availability, prices will be slightly more muted,” says Childs. “Whereas in the BVI [British Virgin Islands] we’ve got nothing available, and in the U.S. Virgin Islands there’s very little available.”
And therein lies the problem with putting a valuation on the two St. Jameses, which are just off the coast of St. Thomas: There really isn’t that much to compare them to, at least not publicly.
One nearby, undeveloped 230-acre island off the coast of St. Thomas, Thatch Cay, is listed for an undisclosed price, though in 2019 the Virgin Islands Daily News reported that it had been cut from $27.5 million to $19.5 million. An undeveloped, 29-acre plot of land on St. Croix, which is also part of the U.S. Virgin Islands, is listed for $2.75 million.
Bailey cites the 2014 sale of the 55-acre Little Thatch Island, in the British Virgin Islands, which he says sold for $55 million. “That’s a million dollars an acre,” he says. “I think it makes the Jameses look like an excellent buy.” Epstein’s islands are priced at $543,000 per acre.
On Epstein’s Islands
And what, exactly, would someone be getting for their money? Little St. James has a main compound, four guest villas, three private beaches, two pools, a helipad, and a private dock, according to its listing on the Modlin Group’s website. Video shows a topography largely cleared of vegetation, with carefully placed hedges and palm trees to shield terraces and pools from prying eyes.
Great St. James is effectively untouched, with only a small cluster of buildings visible from satellite imagery. Roads crisscross lush hills, leading down to islets and yet more beaches. One side of the island, closer to St. Thomas, contains a cove that’s a popular mooring site for pleasure boats. “The side that looks over St. Thomas has a very nice bay, but it’s very busy, so it’s a slight issue to do with privacy on one side,” Childs says. The other side, facing Little St. James, he adds, is much more secluded.
Other Options
Although no two islands are exactly alike, a cursory comparison of others available in the Caribbean offers a variety of much cheaper options.
The Bahamas’ 40-acre Little Whale Cay has its own landing strip, deep-water marina, main house, and two guesthouses as well as, among other things, a private lake stocked with flamingos, according to offering materials. Its price: $35 million.
Cave Cay, also in the Bahamas, is designed (though not fully completed) as a private resort. The island covers 220 acres, and its current infrastructure includes a deep-water harbor with 35 dock slips, a 2,800-foot private landing strip, and a cluster of houses and maintenance buildings, along with its own solar panels, desalination facility, and water storage. It’s on the market for $55 million.
But those islands are in the Bahamas. There are no major developed Caribbean islands, brokers say, currently for sale under the U.S. flag.
“As far as I’m aware, there’s nothing else available you can go out and buy,” Childs says. “Somebody won’t care and say, ‘That’s what I want. Everyone will have forgotten about [Epstein] in five years’ time.’” But, he continues, “until you go to market, you don’t really know.”
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