A collection of condominiums at some of Boston’s swankiest addresses are part of a clash between warring factions of the Saudi regime, a power struggle with global political implications that also highlights Boston’s standing as a haven for international real estate investors.
A lawsuit filed last week in Suffolk County by a Saudi Arabian investment fund alleges that a top adviser to the country’s former crown prince made off with $3.5 billion in government money, parking a small slice of it in eight high-end Boston condos.
Not so, says the adviser, Saad Al Jabri, who was once a top Saudi intelligence official. He says the condos were a legitimate investment and that Saudi Arabia’s current crown prince, Mohammed Bin Salman, is simply trying to eliminate a political rival under the guise of an anticorruption purge.
Either way, the dispute, as spelled out in court filings in Boston and Ontario — where Al Jabri is living in exile — shines a light on the international trade in luxury condos across the city, multimillion-dollar deals that help fuel construction of high-end towers. And, critics say, it highlights how the high end of Boston’s real estate market can often function as a vault for global wealth, disconnected from the city as a whole.
“This just kind of reaffirms the idea that luxury real estate is a wealth storage system,” said Chuck Collins, a senior scholar at the Institute for Policy Studies, a think tank that has studied the sale of expensive condos in Boston. “Whether you earned it virtuously or stole it from your people, this is a good place to bring your money.”
Al Jabri started buying property here in 2013 when he served as a key aide to then-Crown Prince Mohammed bin Nayef, overseeing a large investment fund that paid for counter-terrorism operations. That money was invested all over the world and a small slice of it wound up paying for real estate in Boston, where — according to a person familiar with the deals — his son was attending medical school at the time. At the heart of the lawsuit is whether Al Jabri had permission to buy the properties.
The lawsuit and Suffolk County property records show that Al Jabri’s companies paid $6.6 million to buy five units including a penthouse at Millennium Place, a luxury building near the Ritz-Carlton hotel in Downtown Crossing. In 2017, one of his firms spent $4.3 million for a condo at the Mandarin Oriental on Boylston Street. And in January 2020, the same company closed a $13.75 million deal for two condos on the 52nd floor of the One Dalton skyscraper, Boston’s tallest residential building.
All told, Al Jabri’s firms spent about $25 million in the city.
Today, all eight units appear to be rented out, according to the lawsuit and listings on various real estate websites. The larger of the two condos at One Dalton — a nearly 3,000-square-foot, three-bedroom space with panoramic views — rented in October for $20,000 a month, according to a listing, though not before its asking price was cut nearly in half. In all, the Saudis’ lawsuit claims, Al Jabri’s firms collect nearly $80,000 a month in rent from their Boston holdings, a small part of a vast portfolio of real estate and firms that Bin Salman — who ousted bin Nayef in 2017 and is now the heir apparent to succeed his father on the Saudi throne — is trying to reclaim.
A representative for Millennium Partners, which built Millennium Place, said the firm follows “all standard vetting procedures,” before selling condos. One Dalton developer Carpenter & Co. declined to comment on its dealings with Al Jabri. The unit at the Mandarin was bought from a private owner, not the building’s original developer.
Foreign buyers, of course, have long been a part of Boston’s high-end housing market, with well-heeled parents routinely buying condos for their children to live in while in college.
Overseas interest has accelerated in recent years, as foreign enrollment has grown at local universities, Boston has emerged as a more prominent global business destination, and wealthy individuals look for ways to move money out of their sometimes-tumultuous home countries. As larger luxury condo buildings have proliferated in recent years, some developers designed amenities to appeal to international clients, and launched road shows to market to would-be buyers in China, the Middle East, and Europe.
Still, overseas buyers can be a delicate topic among people in Boston’s luxury condo business. Developers are wary of the perception that their buildings are controlled by super-wealthy absentee owners from abroad, in a city facing a severe housing shortage.
Some buildings, including One Dalton, have instituted limits on how many units are sold to buyers who don’t plan to live on the premises, and market largely to locals — often suburban empty-nesters who want to move downtown. Still, the global market is enormous, and projects such as Millennium Tower — where a network of Chinese investors bought 22 condos in bulk in 2016 — have found overseas buyers to be a key part of their business plan.
That has critics such as Collins calling for a tax on high-end real estate sales, which they say would at least leverage these international deals to help Bostonians of lesser means.
In late 2019, the City Council passed a measure — co-sponsored by now-Acting Mayor Kim Janey — that would assess a 2 percent tax on sales of $2 million or more, which the city estimated would raise $169 million a year for affordable housing. The plan, which needed approval from the state Legislature, fizzled on Beacon Hill. But it’s worth another try, Collins said.
“As a resident of Boston, I’d love to see that happen,” he said. “If these developers want to turn my city into a plutocratic playground for the ultra rich, I’d like them to pay more for affordable housing for the people who actually live here.”
These sort of sales — which are often conducted through shell companies that can obscure a buyer’s identity — have also drawn the eye of federal regulators, who worry the murky transactions are ripe for money laundering. Since 2016, an arm of the Treasury Department has been investigating all-cash sales made through shell companies. In 2018, the Treasury Department announced it was expanding the list of cities where cash buyers must share their names with the federal government to include Boston.
In this case, though, Al Jabri is appealing to the US government for help.
In August — a few months after bin Salman detained two of Al Jabri’s children who still live in Saudi Arabia — Al Jabri filed a lawsuit in federal court in Washington. It detailed alleged efforts by bin Salman’s agents to track down him and members of his family while they lived in Boston in 2017, and alleged that bin Salman later sent a squad of hit men to assassinate him in Canada — a plot foiled by Canadian authorities. That was in 2018, he said, just weeks after the killing of Washington Post columnist Jamal Khashoggi, an assassination which the CIA has blamed on bin Salman. Al Jabri says his life is at similar risk, and that bin Salman’s lawsuits and other actions are part of “a violent campaign to silence” him.
The new crown prince, though, has continued to press his case in court, painting Al Jabri as a profiteer in a corrupt prior regime who simply plowed government money into his own investments, including the Boston condos. Last week, after an Ontario court moved to freeze Al Jabri’s assets, the Saudi government asked a Suffolk County judge to seize the condos, and to direct the $80,000 in monthly rent they generate to its investment fund, instead of Al Jabri’s companies.
On Monday, the proceedings were moved to federal court in Boston, where a judge will join the growing number of legal experts trying to sort out a case chock-full of international intrigue and sinister allegations.
Tim Logan can be reached at firstname.lastname@example.org. Follow him on Twitter at @bytimlogan.