A $150 Million Plot of Land Hits Market in Bel Air, House Not Included
(Bloomberg) -- You can build your dream home from scratch just across from the Hotel Bel Air.
You’ll just need a little over $14 million per acre for the land.
Three parcels totaling 10.6 acres, each of them carrying the necessary permits to build a 60,000-square-foot house, have just become available in the trendy Bel Air neighborhood of Los Angeles. The area is home to a combination of billionaires (Rupert Murdoch’s ranch and winery was singed by the recent Skirball fire), and celebrities, including Beyonce and Jay Z, who bought an $88 million spec house in 2017.
The property’s history isn’t nearly as glitzy.
Twenty years ago, the land, which is directly across the street from the Hotel Bel Air, was carved into eight separate lots. A single individual began to acquire them one by one, and then sold all of them to developer Domvs London and Junius Real Estate Partners, the real estate investment art of JPMorgan Chase & Co., in 2014.
The partners immediately rezoned the tract into three, larger properties and tried to sell one, measuring three acres, for $45 million in 2015.
The property sat on the market for a year, and then the owners took it off the market. “We should have waited,” says Barry Watts, the president of Domvs. “We still had construction vehicles and earth movers and everything you get with a large-scale site like this, and we were a little ahead of our time.”
Four years later, the land is pristine, leveled, and back on sale, this time with a price tag of $150 million for the entire 10.6 acres. “If someone wants to buy one of the three [original, three-acre] individual lots, we can discuss that with them,” Watts says, “but we found the property appeals to people more as a legacy purchase—we’ve had more inquiries from people saying ‘I want to buy the whole property.’ ” The land is listed with Connie Blankenship, a broker with Douglas Elliman.
Watts says that they’ve spent “tens of millions” of dollars improving the land. Large retaining walls were constructed in order to expand the usable land.
“Not only are we offering someone a lot of flexibility,” Watts says, “they’re also going to save considerable time. If someone bought raw land and went through what we went through, they’d probably spend three to four years of their life going through construction permitting.” The land, he continues, “is what we in the industry call ‘shovel ready.’ ”
Those shovels have license to go unusually deep for the area. “One of the key benefits is you can also build a large subterranean level,” he says. Last year, the median price for a home in the area was $3.2 million, according to a report by Douglas Elliman, but the neighborhood is home to some of Los Angeles’s more outrageous properties. There’s a 38,000-square-foot spec home that comes with a decommissioned helicopter on sale for $150 million; a $49.9 million mansion with 20,000 square feet of underground space; and “Chartwell,” a 10-acre estate used in The Beverly Hillbillies, currently on sale for a mere $245 million.
Domvs has already commissioned renderings for a new house to rival its neighbors, plans for which can be included in the sale. The property has views of the city, the ocean, and, on a clear day, Catalina Island off the coast.
The listing comes during a modest downswing in L.A.’s real estate market, where inventory is rising and homes are taking longer to sell. In Bel Air, the average sales price was down nearly 21 percent year-over-year during the fourth quarter of 2018, according to a report by Douglas Elliman, which noted that “the number of sales jumped as negotiability expanded sharply.”
When the first Bel Air plot was listed, its price broke down to $15 million an acre. Today, even after all the improvements Watts says he’s done to the land, the price has been reduced to just over $14 million per acre.
“We’ve actually priced this extremely competitively,” he says. “We’re looking to avoid what other developers have done, which is to set the price really, really high and then come down. We see ourselves as an intelligent investment group.”
Still, buyers might make a few uncomfortable comparisons. Most prominent among them is what’s been dubbed “the mountain,” a billion-dollar, 157-acre plot of land in Beverly Hills, which comes out to about $6.4 million an acre, or less than half of what Watts is asking. This, Watts says, isn’t a reasonable comparison because the mountain, as the name implies, is “130 acres of hillside, and then 30 acres of usable land.”
The key, he continues, “is that we’re not selling homes, we’re selling flexible land that people can customize. It’s very different” than the many spec homes that have clogged the high-end market.
Watts says there’s already been a significant amount of advance interest.
“We had someone visit the site last week—and they’re a local whose family is maturing, and they’re considering creating a family compound,” he says. “And we’ve had people from New York who want to live bicoastal, and we’ve also had inquiries from people in Asia, Europe, and the Middle East.”
His process, he says, has been deliberate from the very beginning. “The ownership group has been very consistent,” he says. “We’ve been very focused developing it to what it is today, and at this point, for the very first time, the estate is presentable.”
To contact the editor responsible for this story: Chris Rovzar at firstname.lastname@example.org
©2019 Bloomberg L.P.