Location, Location, Location

Liz Taylor's hacienda is around the corner. Zsa Zsa Gabor's cottage is just up the street. Joanna Carson and Robert Stack have their digs within Shih Tzu walking distance. Ah, it will feel so good to be back home again.

Perched in the best section of "old Bel Air" in west Los Angeles, 668 St. Cloud Road is the newly chosen site of Ronald and Nancy Reagan's post-White House home. In selecting the place, the Reagans wisely relied on the traditional real estate mantra -- location, location, location. But they chose an unusual procedure for acquiring their new homestead: they are leasing it from a consortium of about 20 friends and investors who purchased it specifically for the President and the First Lady.

The one-acre, $2.5 million estate was acquired as an investment by the group, which incorporated itself as Wall Management Services. According to Nancy Reagan's spokeswoman, only two of the investors know the President personally. The three-year lease (no one even whispered what the rent is) gives the Reagans the option to buy or renew the lease at the end of the contract.

Although modest by local standards, the 6,500-sq.-ft. house has three bedrooms, a library, dining room, barbecue room, pantry room, two servants' rooms, a heated swimming pool and a three-car garage. Realtor Jeff Hyland says that since the land value of the plot alone could be as high as $3 million, "the house in a sense came for free." A furnished brand-new home two doors down from the Reagans' new abode recently sold for $14.75 million. "Reagan got the cheapest house in the area," says Hyland.

The hunt for a house began about three years ago, when Mrs. Reagan's friends Betsy Bloomingdale and Marion Jorgensen began a surreptitious search in the area. But word got around the real estate circuit, and the women were besieged by eager brokers. When a social acquaintance of Jorgensen's telephoned her to say that her elderly, recently widowed niece might want to part with her St. Cloud home, Jorgensen and Bloomingdale found what they -- and the Reagans -- had been looking for. In August 1986, Wall Management quietly bought the house and leased it back to the widow, who has since died. Reagan had apparently considered a few houses about a year and a half ago, but balked at the multimillion-dollar price tags.

Why Reagan did not purchase the house is unclear. But the President and the First Lady have a history of accepting such benefits. When Reagan was Governor of California, a group of friends bought a house for the Reagans and rented it back to them. The President consulted the White House counsel and the Office of Government Ethics before signing the lease last month.

The St. Cloud home will undoubtedly be the Reagans' primary residence. Nancy reportedly does not care for Ronnie's beloved ranch near Santa Barbara. Besides, the only neighbors there are a few dogs and horses.