Meet the Couple Spending Millions to Save California’s Architectural Gems
John McIlwee and Bill Damaschke’s collection has included the Lautner-designed Garcia House in Los Angeles and the former Rancho Mirage estate of Gerald and Betty Ford
9 min
As a Capricorn, John McIlwee considers himself a spiritual person. But when his psychic told him in late 2021 that he was going to buy another house, he didn’t believe it. McIlwee and his husband, entertainment executive Bill Damaschke, already owned a portfolio of three architecturally significant California homes, and they’d decided not to take on any more projects.
“I said, ‘Hell, no. You’re wrong on this one,’” recalled McIlwee, 56, a Hollywood business manager.
Two days later, they’d signed a contract to buy a circa-1960s house in Rancho Mirage, roughly 10 miles from Palm Springs.
Sometimes, McIlwee just can’t help himself. The idea that someone might tear down or alter a beautiful old house is more than he can bear. In the case of the low-slung Rancho Mirage home, he couldn’t stand the thought that a developer might destroy it.
“I know myself,” he said. “If I let that house fall into the wrong hands and get ruined, it would piss me off every time I drove by.”
Over the past few decades, McIlwee and Damaschke, 59, have purchased and restored multiple houses, including former President Gerald Ford’s onetime estate and John Lautner’s Garcia House, an almond-shape structure considered one of L.A.’s most significant midcentury houses. McIlwee and Damaschke typically hold their houses long term and live in them, hosting parties and sometimes allowing commercial photo shoots.
“We’re living in a world now that is unsustainable with what people are destroying,” McIlwee said. “I didn’t particularly sign up to be some weird preservationist, but I look at these things as kind of like a mark in history.”
The couple admire how billionaire grocery tycoon Ron Burkle has restored a number of important trophy homes across California, McIlwee said. In comparison, he said he and Damaschke might be considered “Ron Burkle Light.”
“Ron’s doing the $50 million things,” he said. “We’re doing the $10 million things.”
McIlwee, a California native, serves as business manager to celebrities such as “The Batman” director Matt Reeves and “Glee” star Jane Lynch. Damaschke grew up in Chicago, where he admired the local Frank Lloyd Wright houses and took high school drafting classes. He originally harboured notions of becoming an architect himself, but eventually wound up in the theatre, working as a Broadway actor and later transitioning to the business side of the L.A. entertainment world. He is now president of Warner Bros. Pictures Animation, and is also a producer of Broadway shows such as “The Prom” and “Moulin Rouge,” for which he won a Tony Award in 2021.
When it comes to their homes, the two said they typically work with the same “rat pack” of professionals, including landscape architect John Sharp, interior designer Darren Brown and architecture firm Marmol Radziner. McIlwee also sets up Instagram accounts for all the homes, posting historic photos and images from their parties and photo shoots.
“They are consummate cheerleaders for their houses,” said Leo Marmol, a California architect who has helped the pair restore several homes. “Their goal is not to pour liquid amber over a historic object to kind of freeze it. It’s the opposite. It’s to invite the world in to celebrate the home.”
McIlwee said he handles most of the logistics and the execution of their projects, while Damaschke is more of a creative thinker and would spend more money if McIlwee didn’t rein him in. Though he doesn’t consider the homes as investments so much as passion projects, “I never want to lose money,” he said.
The pair mostly agree about design choices, with a few exceptions.
“Sometimes we have huge screaming fights and don’t agree on anything,” Damaschke said with a laugh. “But we end up in a good place.”
One of Damaschke’s pet peeves: McIlwee is “classic California” and leaves all the windows and doors of their homes open. “Sometimes I’ll walk through and close the shades or drapes. He’ll come right behind me and open every one of them up after I leave the room.”
Read on for a closer look at the couple’s collection.
The couple’s primary residence for roughly 20 years was the Lautner-designed Garcia House, which sits 60 feet off the ground on concrete caissons. Dating to the 1960s, the three-bedroom home is perhaps best known for its star turn in the 1989 movie “Lethal Weapon 2,” where it appeared as the headquarters for a South African drug-smuggling cartel. McIlwee and Damaschke bought the roughly 2,600-square-foot house for $1.2 million in 2002, property records show.
When it comes to architecture, Damaschke said he’s often fascinated by the narrative behind a home, which was the case here. The original owners, film composer and conductor Russell Garcia and his wife, Gina Garcia, “were real trailblazers,” he said, “because the house was unbuildable. The lot was unbuildable. So, I’m like, ‘What possessed these people to build this amazing structure against the tide of what was popular at the time?”
After living in the property for more than a year to get a feel for the space, McIlwee and Damaschke embarked on a roughly $5 million restoration project at the house, which had fallen into disrepair. They also added an ellipse-shaped pool based on Lautner’s original plans.
Living in the house forced them outside, Damaschke said, since getting from the bedrooms to the main living room requires taking an external staircase. “The flow of it actually invited you to be a part of nature,” he said.
However, “it can be overwhelming, like you’re living in an art piece,” he said. “So we worked hard to make it super cozy and comfortable, like a home.”
Damaschke also called it “the best party house in the world.” The pair hosted numerous parties there, including one for the whole cast of “Moulin Rouge.”
After years in the house, the couple was ready to move on to their next adventure, they said. Earlier this year, the couple sold it for $12.5 million to Nicholas C. Pritzker, a member of the famed Pritzker hotel family.
The Ford Estate in Rancho Mirage was designed in the 1970s for Gerald and Betty Ford after they left the White House. Located less than 2 miles from the Betty Ford Center, the rehabilitation centre founded by the former first lady, the roughly 6,300-square-foot, five-bedroom house faces one of the fairways of the Thunderbird Country Club.
McIlwee and Damaschke caught their first glimpse of the property decades ago during Palm Springs Modernism Week, when they were doing research for their renovation of the Garcia house.
When the house came on the market in 2012 following Betty Ford’s death, they jumped at the chance to see it, and quickly fell in love. The house had its original décor in place, including the 7-foot-tall portrait of Betty Ford in the entryway, the red panic button in the president’s personal bathroom and the lime-green dining room, with its leafy mural and lattice chairs. They signed a contract within just 11 days of the listing going live, paying about $1.6 million.
McIlwee said he enjoys the irony that a Republican president’s home has fallen into the hands of “two gay Democrats.” He said he considers Betty Ford a trailblazer and forward-thinking for her day. “She was very sympathetic to a lot of people,” he said. “That’s the problem with American politics today. Nobody talks to each other.”
The house was designed by Welton Becket & Associates, the company behind the Galactic-style Capitol Records Building in Hollywood, in Desert style, with swaths of glass and a flat roof with overhangs. The vividly colored interiors were designed for the Fords by Laura Mako, who also designed homes for the likes of Gregory Peck and Jimmy Stewart.
The couple did significant work to the property with help from Marmol, but with the goal of maintaining the original structure. “We weren’t looking to make dramatic changes,” said Marmol. “We were actually trying to preserve the original drama of the home, while making subtle interventions to make the house more functional by today’s standards.”
Because of security concerns, the Fords had left the house relatively unexposed to the outside, so McIlwee and Damaschke added several windows and skylights. They opened up the entertainment areas to the outdoor pool and replaced the kitchen, which had been designed more as a service area than as the heart of the house, McIlwee said.
They preserved much of the interior design and furniture, including the Betty Ford portrait, which the Ford family had originally intended to sell at a Gerald R. Ford Presidential Foundation event to raise money. The couple donated to the foundation instead, they said.
“We were like, ‘No, this has to stay with the house,’” Damaschke said. “It’s a showstopper.”
The couple uses the property as a weekend and vacation getaway and frequently host friends and clients there, McIlwee said. They have no plans to sell it.
In 2021, McIlwee made a snap decision to buy a second house in Rancho Mirage, just down the street from the Ford Estate on Sand Dune Road. The move flew in the face of a conversation the couple had recently had about taking a step back from their renovation projects, which take up a lot of time and money.
The rationale? He was concerned that a developer would buy and ruin the house, a modest 1960s home that he believes was designed by the architect William Francis Cody.
“He was very anxious about it,” Damaschke said.
McIlwee chalked his anxiety up to the flipping frenzy that took over the Palm Springs and Rancho Mirage markets during the pandemic. Developers, he said, were buying houses, putting “maybe $100,000” into them, painting them white, adding a cactus and reselling. He found the bright white paint jobs especially abhorrent, preferring the traditional sand tones of desert houses.
“I wasn’t going to let that happen on my street,” he said.
At the time of the purchase, Damaschke said, he was in London and sick with Covid. “I didn’t really have a say in that one,” he said with a laugh. “He snuck it in under the radar.”
“I just said, ‘Sign this,’” McIlwee said.
They paid about $1.4 million for the three-bedroom house, which also sits on the golf course at Thunderbird. Spanning about 3,400 square feet, it has travertine floors and 16-foot sliding doors leading to the pool deck.
The house had undergone several “bad” renovations that have “glommed on to each other,” McIlwee said, and needs a lot of work. They plan on peeling back much of the block siding and basework and removing an addition that a previous owner put on the house. He estimated the cost at around $1 million.
McIlwee said they are unsure of their long-term plans for the property, but they might rent it out.
This year, the couple bought a four-bedroom Modernist house in Beverly Hills designed by the little-known Mexican architect Raul F. Garduno.
Located in the tony Trousdale enclave, the roughly 5,400-square-foot home was built in the early 1970s and has long, curving hallways, a step-down living room and a rounded swimming pool. Its design is unusual, Marmol said, because the various wings of the house seem to splay out from a single point like an off-centre windmill. The house also steps up as the site slopes down, so the house seems to respond directly to the shape of the earth.
McIlwee and Damaschke said they first saw the property when a friend who runs a design company rented it as a show house. “When Bill and I walked in, we were immediately like, ‘We’re going to get this house,’” McIlwee said.
At the time, the property was still owned by the same family it had been built for five decades prior. The original owner’s daughter, Lynne Corazza Anderson, had been fielding offers, McIlwee said, but most of the competitive ones had come from developers, who planned to tear down the house and replace it. Though he was aware of the proliferation of spec developments in the Trousdale neighbourhood, which has drawn celebrities like Jennifer Aniston and David Spade, McIlwee said he found the notion of tearing down the house “dumbfounding.” The couple decided to sell the Lautner house and use the capital to restore the Garduno house.
McIlwee convinced Anderson to hold off on accepting any of the offers for several months so that he and Damaschke had time to sell the Lautner house. Eventually they bought the Garduno house for $9.6 million in April. He estimated that they will spend at least another $3 million renovating it. They already have plans to redo the kitchen and bathrooms. They also intend to wall up some doors in the hallway to create an art corridor.
McIlwee said he also intends to amplify Garduno’s name.
“In every magazine right now, people are talking about Mexico City. Well, this is the perfect example of Mexican Modernism,” he said. “I’m taking it upon myself to give this guy some air.”
The house will be the couple’s new primary home; it is their first time living in the coveted 90210 ZIP Code. Two friends who came to lunch earlier this summer brought the couple a “Welcome to 90210” cake. “I’m still laughing about that,” McIlwee said.
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Rising Australian bond yields are putting pressure on listed property and the cost of capital. Here’s why A-REITs can signal changes in property valuations before the direct market moves.
4 min
Most property investors spend considerably more time watching interest rates than bond markets.
That makes sense. The Reserve Bank cash rate has an obvious relationship with mortgage repayments, borrowing capacity and investor sentiment, while government bonds can seem far removed from what someone will pay for an apartment in Sydney or an office building in Melbourne.
But the bond market can provide one of the earliest indications that the price investors are willing to pay for property is changing.
That became evident last Thursday, when Australian shares suffered their worst trading session in months. The S&P/ASX 200 fell almost two per cent, with property among the rate-sensitive sectors caught in the sell-off as government bond yields moved sharply higher.
Australia’s 10-year government bond yield pushed to around 5.4 per cent, close to its highest level in 15 years, against a backdrop of rising global yields and renewed concern about inflation and the direction of interest rates.
For property investors, that matters because the government bond yield is effectively one of the reference prices for money.
An investor buying an Australian government bond is receiving a return while taking comparatively little credit risk. Property comes with tenants, vacancies, maintenance, leasing costs, illiquidity and the possibility that the underlying asset falls in value, so investors generally expect to be compensated for accepting those additional risks.
A property yielding five per cent therefore looks considerably more attractive when a 10-year government bond yields three per cent than when that same bond is yielding more than five per cent.
That does not mean property values automatically fall every time bond yields increase. Rental growth, scarcity, lease structures and the quality of an asset can all outweigh movements in rates, but it changes the return investors require and therefore what they may be prepared to pay.
SG Hiscock & Company made that point in an ASX Investor Update, arguing that real, or inflation-adjusted, bond yields can be particularly relevant to property because real estate is fundamentally a long-duration investment whose value is derived from future income.
The first place investors can often see that repricing is the sharemarket.
A house or commercial building does not have a price that changes every few seconds. An Australian real estate investment trust does.
A-REITs can own billions of dollars of shopping centres, offices, warehouses and other property, but their securities trade continuously on the ASX. When expectations around interest rates and bond yields change, investors can immediately alter what they are willing to pay for those property earnings.
That can create a situation where the value attributed to a portfolio on the sharemarket falls even though the underlying buildings have not changed hands and their independent valuations remain unchanged.
The two markets simply move at different speeds.
Mark Ferguson, Head of Charter Hall Maxim Property Securities, has previously described direct property valuations as lagging the listed market. Writing for Charter Hall during an earlier period of rising interest rates and bond yields, Ferguson noted that listed property was already pricing increases in capitalisation rates and falls in underlying property values before those adjustments had fully emerged in direct-market valuations.
The effect can be substantial.
Consider a commercial property producing $1 million a year in net operating income. At a five per cent capitalisation rate, that income implies a value of $20 million.
If investors subsequently require a 5.5 per cent return while the property’s income remains unchanged, the implied value falls to around $18.18 million. At six per cent, it falls again to roughly $16.67 million.
Nothing necessarily happened to the building. It could have the same tenant paying the same rent under the same lease. What changed was the return required by the person buying it.
That is also why income growth becomes so important.
A well-located property with constrained supply and strong rental growth can increase its earnings quickly enough to absorb some of the pressure from higher required returns. An ageing office building facing vacancies, refurbishment costs and an approaching debt refinancing could instead be hit from several directions at once.
Debt adds another dimension because property is one of the economy’s most capital-intensive asset classes.
Higher market rates can increase the cost of financing an acquisition or refinancing existing debt while simultaneously increasing the return investors expect from the property itself. For developers, the consequences can be even more pronounced because higher construction finance costs can coincide with lower anticipated end values.
If that happens, a project can be squeezed from both directions: it becomes more expensive to deliver at precisely the time investors become less willing to pay yesterday’s price for the finished asset.
The direct property market generally takes longer to reveal that adjustment.
An A-REIT can lose five per cent of its market value in a trading session. An office building may not transact for another year. Owners can reject lower offers, transactions can be withdrawn and valuers must wait for comparable sales to establish new evidence.
That lag is one reason listed property can be useful even for investors who have no intention of buying a REIT.
The same principle eventually extends to residential property, although houses and apartments are generally valued using comparable sales rather than capitalisation rates.
Residential property is particularly sensitive to credit. Higher bond and swap rates can influence bank funding and fixed mortgage pricing, while higher borrowing costs reduce the amount households can service.
If prospective buyers can borrow less, the number of people capable of paying yesterday’s price can shrink. Vendors may initially resist that adjustment, resulting in fewer transactions rather than immediate price falls, before motivated sales eventually establish new comparable values.
For investors, rental growth can provide an important buffer. Rising rents can help offset higher financing costs, just as increasing commercial rents can compensate for some expansion in capitalisation rates. Investors relying primarily on capital growth while accepting a low rental yield have considerably less protection when the cost of money rises.
That is why movements in listed property and bond markets deserve attention beyond the trading floor.
They provide a constantly updating view of how investors are pricing interest rates, debt, future income and property risk, often months before those changes become obvious in direct transactions.
For an A-REIT investor, that means looking at gearing, debt maturity, hedging, interest cover and the discount or premium to net tangible assets rather than simply chasing the highest distribution yield.
For a commercial property investor, it means testing what happens to valuations if capitalisation rates move 25, 50 or 100 basis points higher.
For residential investors, it means understanding mortgage costs, borrowing capacity, realistic rental income and how much of the investment case relies on future capital growth.
The cash rate will continue to attract most of the attention in Australian property. But investors looking for an earlier indication of how the market is repricing risk should also be watching the bond market.
Property prices might take months to respond to a changing financial environment. The price of money moves considerably faster.
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