Several months later, that record was quietly matched in the coastal community when billionaire investor Daryl Katz—owner of the NHL’s Edmonton Oilers—bought the estate of Westside Estate Agency co-founder and CEO Kurt Rappaport. The purchase included artwork, furnishings, and everything else in the home.
Now a deal has come along that handily eclipses the record. We’re referring to the $110 million sale of the beachfront estate of hotelier Peter Morton.
The home wasn’t even on the market, but Canadian billionaire Michael S. Smith and his wife, Iris, made Morton an offer he couldn’t refuse.The Smiths had been shopping for a Malibu property for years, and after renting Morton’s, they finally persuaded the hotel mogul to sell it.
The home is one of the sparkliest gems among the trophy properties along this stretch of beach. The compound on a half-acre, double lot was designed by architect Richard Meier.
Public records show Morton acquired the side-by-side lots at different times for $5.6 million total. However there’s no word on what he spent to build the ultraluxe compound.
But one thing the Morton property has in common with the two $85 million sales is that none of the properties was on the multiple listing service when it sold. Which raises an intriguing question: Is Malibu real estate a closed loop of billionaires stealthily slipping in to strike megadeals with other billionaires?
Is Malibu only for billionaires?
According to The Agency’s Sandro Dazzan, the only thing keeping prices from regularly cresting the nine-digit mark is a lack of inventory in the rarefied community of $100 million-plus properties
According to Dazzan, who was involved in last year’s record $50 million sale of undeveloped land in Malibu, “There’s a huge amount of wealth coming in right now and not enough product at the super-high end.”
There is a limited number of properties of substantial size and distinction in Malibu’s most desirable area. Carbon Beach is within walking distance of venues such as Nobu and the Soho House. Billionaire Larry Ellison, co-founder and chairman of Oracle, alone owns about 12 homes on that coveted stretch, and the ultrawealthy who can’t buy there (not for lack of funds, but for lack of availability) lease there.
Another factor propping up the eye-popping prices of these Malibu homes? They were all recently remodeled, so no additional work was required. Homeowners and agents know the Coastal Commission—which oversees all construction in the area—is notoriously tricky to deal with and is prone to taking its time.
“I sold a new home last year that had taken the developer 10 years to build, because of permitting issues,” says Dazzan.
The bigger picture
These high-end deals have a ripple effect on the Malibu market, says Susan Monus of Coldwell Banker Global Luxury, who’s been working in the Malibu market for over 20 years. “Big sales beget big sales,” she says.
Dazzan agrees. “High prices at the upper end help solidify the market,” he says. He notes the $110 million estate with over 100 feet of beach frontage makes the $13.7 million Carbon Beach property with 60 feet of beach frontage that he’s repping look like a value play.
It’s odd to consider anything in the range of $14 million a bargain, but the value is relative, according to Monus.
“I have always considered Malibu to be the Riviera of the United States,” she says. “It’s a major destination, and it’s been underpriced for years, while becoming more and more desirable.”
Malibu is not only a world-renowned place to live, it’s also a great place to invest in, Monus adds.
“Not everyone chooses to put their money in the stock market,” she explains. “Malibu real estate is an excellent investment, providing double returns. The value is certain to increase, and there will be a profit when it’s time to sell. But in the meantime you can benefit from lease income.”
She notes current lease prices near the beach range from $2,850 a month for a studio to $275,000 a month for the 6-acre estate known as Villa Contenta.
And sellers like the owners of this five-bedroom, six-bathroom beachfront home on Malibu Road can easily wait for their $28 million asking price when they’re leasing out the home for $80,000 a month.
Agent Paul Lester with The Agency partly attributes the price surge to international interest. Prices are rising at most Malibu price points, he says, because “international buyers are finally beginning to realize the value.”
Lester explains that in the not-so-distant past, when people came to Malibu for the first time, “they didn’t get it.” When compared with the lavish estates of Bel Air and wide or mansion-lined streets of Beverly Hills, the unassuming house on the Pacific Coast Highway might seem shabby. However, once overseas buyers understand the world’s most powerful, prestigious, and wealthy residents are paying top dollar for homes there, they’re interested.
The convenience factor
Monus points out that many would-be residents are looking in Malibu for second homes, while keeping a main residence in Brentwood or Beverly Hills. There are few other places in the world where you can be at your beach vacation home in a half-hour without having to hop on a plane.
“It’s only a short drive from L.A., but you feel like you’re in another world,” says Lester.
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