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The Real Deal Los Angeles

Will “party house” regulations hurt LA’s mansion rental industry?

Brokers say increasingly popular mansion rentals bring owners $20K to $500K per party

November 17, 2016 05:00PM
By Susan Hornik

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A mansion rented for a Hallmark Channel event, Aaron Kirman Michelle Oliver and David Ryu

A mansion rented for a Hallmark Channel event, Aaron Kirman, Michelle Oliver and David Ryu

The roped-off entrance to the club used to be the height of exclusivity. Nowadays, in the age of smartphone-paparazzi and TMZ, it isn’t enough to keep the riff raff out.

Event organizers are increasingly turning to luxury homes for private parties, industry insiders told The Real Deal. For property owners willing to play ball, the upside is high — event organizers told TRD they have spent as much as $500,000 to rent a luxury property over a three-day weekend.

But while the spike has been a boon for some owners, realtors and a growing private events business, not everyone is happy about this development.

Earlier this month, the Los Angeles City Council unanimously approved council member David Ryu’s motion, which instructs the City Attorney to draft an ordinance to regulate “party houses.”

Ryu has been rallying against party pads since last year, when he suggested that renting a house for the sole purpose of a rager become a misdemeanor. His motion directs the City Attorney to consult with the Los Angeles Police Department to draft an ordinance that includes escalating fines for successive violations for both hosts and property owners, among other penalties.

​”I think aggressive fines will slow it down but if they really want to control it, they should shut down parties,” said Michael Nourmand, president of Nourmand & Associates. “The uncertainty of spending a fortune to throw a party and not knowing if it will be shut down should drastically reduce huge parties at mansions.”

While not all mansions rented for parties will be affected by the regulations, some insiders said the enforcement has the potential to slow the fast rise of party rentals. According to BizBash, an online news and resource center for event and business entertaining professionals, there was a 60 per cent increase this year in searches of the BizBash.com venue directory for private homes and mansions in Los Angeles.

“Everyone is looking for an exclusive venue, and private homes — particularly ones with expansive outdoor space and pools — are popular choices for events,” BizBash executive editor Beth Kormanik told TRD. “We’ve covered events at private homes for big brands like Target, Reebok, the Honest Company, and Samsung. They’re especially appropriate for lifestyle brands that want to show their product in an aspirational, residential setting.” 

Mansions rented for parties can range from $20,000 to $500,000 a weekend depending on the location, duration, client’s preferences, and type of event, industry insiders said.   

“Today, more and more people are having extravagant parties and events at private mansions and exclusive homes,” said Aaron Kirman, president of the international estates division of John Aaroe Group. “These homes provide a glimpse into a lifestyle that is not usually seen by the public.”

Kirman said he receives two to three calls every day regarding using his listings as potential event locations. But not all property owners want boozed-up strangers roaming the premises.

“Many sellers do not wish to hold events at their homes, mainly because of privacy issues and the possibility of damage to the property,” he said. “Some sellers, however, do make their properties available for high profile Oscar, Grammy or celebrity parties, weddings or new automobile launch events, mainly for the financial benefit.”

Michelle Oliver, a luxury realtor at Douglas Elliman’s Beverly Hills office said she throws parties at mansions she is trying to sell, and that this has become more commonplace in recent years.

“For my clients who want exposure for the sale of their luxury property, I will hold a special invitation-only event at a mansion I am selling, with catering and valet parking,” she said. “I will typically partner with a high-end magazine and media for targeted coverage too.”
  

A cottage industry has grown around selecting the right mansions for corporate and Hollywood events. Pam Slay, senior vice president of publicity and social content for the Hallmark Channel, said she uses the special events production company Along Came Mary to help plan mansion parties each year. The firm locates the venue, and takes care of details from the menu to how guests are checked in.

This year, Along Came Mary chose an estate in Beverly Hills for Hallmark Channel’s party for the Television Critics Association, which many  journalists and celebrities attended. The cost: roughly $45,000 for three days, which included, setup, the event itself and breakdown, according to Mary Micucci, Along Came Mary’s president.

“The costs vary with the location company and what the homeowner is willing to negotiate,” Micucci said. “Last year, we rented a mansion for around $55,000. This year, it was roughly $10,000 less and we had so much more to offer our client.”

Event organizers like the level of control that comes with a private party, as opposed to the unpredictability of a restaurant, said Paul Kim, president and owner of L.A.-based Image Locations Inc.

“You can control the environment and security and bring in your own catering and décor,” he said. “Plus, who doesn’t love a private party in the hills?”

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