His majesty of Malibu: A look at Larry Ellison’s real estate spending spree

Click to enlarge (Illustration by Daniel Gray-Barnett)
Click to enlarge (Illustration by Daniel Gray-Barnett)

Billionaire software mogul Larry Ellison has established himself as the big kahuna on the Malibu real estate scene, having acquired 12 separate properties on Carbon Beach in addition to making myriad other real estate investments in the area over the past several decades. Indeed, as Malibu prices head skyward, there is perhaps no greater beneficiary of the rise in value than the Oracle co-founder, who by most accounts has turned the seaside city into his own personal fiefdom.

He’s become such a pervasive presence that when David Geffen sold his Malibu compound for $85.5 million this spring, many assumed the mystery buyer was none other than Ellison. It wasn’t, but one could be forgiven for thinking so.

Sources said Ellison, worth a reported $56 billion, controls so much of Malibu that his real estate decisions now affect the whole market. With so much product in the hands of one individual, supply is tightly controlled, and a large swath of inventory appears to have been permanently removed from circulation. As Ellison’s broker, Kurt Rappaport of the Westside Estate Agency, regularly quips, “There are only so many seats in the front row.” And one big real estate decision by Ellison could reset the tone of the whole market.

His influence is especially significant since he doesn’t live in Malibu full time — neighbors said they know he’s in town when his mega-yacht Musashi is docked near the pier. To his supporters, Ellison is curating a better Malibu. To his detractors, he’s making Malibu even less affordable for anyone who is not superrich.  

Access to the beachfront homes is even more severely limited by the fact that Ellison rarely rents out the properties, choosing only to loan them to close friends and family, sources said.

“The fact that you have one guy owning so much makes the commodity hard to get,” said Jeff Hyland of luxury brokerage Hilton & Hyland. “Whether it’s him or someone else, he pays a big price and suddenly the next property on the market is asking that much more.”

With additional investments in Soho House Malibu and Nobu Ryokan Malibu hotels over the past couple of years, Ellison is now extending his reach over Malibu’s fledgling hospitality sector, giving him control over the city’s social scene too. Many of those projects, which have effectively helped Malibu transform from culinary wasteland to foodie destination, have also been instrumental in driving up the value of his own surrounding properties. Ellison is reportedly a fan of Japanese food and favors Nobu’s sashimi and crispy rice.

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All in all, based on a back of the napkin calculation, Ellison appears to have paid in excess of $250 million for properties in Malibu since 2002. According to Zillow, the median price for a residential property in Malibu has risen by more than 40 percent over the past five years, meaning Ellison could be in for an almighty windfall if he ever sells.

His Malibu buying spree began in 2002, when he bought his first house on Carbon Beach for just under $11.8 million. Now — in addition to other holdings in the area — he owns at least 12 properties on the beach, including a 7,700-square-foot, five-bedroom home that he bought in April for $48 million from Lisette Ackerberg, the widow of real estate developer Norman Ackerberg. His other homes include properties previously owned by Yahoo! head Terry Semel and TV producer Jerry Bruckheimer.

In 2004, Ellison bought Nobu Malibu along with the restaurant property next door for $17.6 million. In 2013, he installed a bistro called Nikita, named for his girlfriend, Nikita Kahn, in the vacant restaurant space, but the business struggled before shuttering in 2014. Ellison then courted the trendy members-only club Soho House for months and even paid for a buildout to entice it to take over management of the property next to Nobu.

“He saw that [Malibu] was under-utilized in terms of its amenities,” Rappaport said of Ellison’s approach. “There were no great restaurants, no great retail. It was a town full of T-shirt shops and cafés. It wasn’t befitting to the value of the properties and the stature of the property owners. Every other major coastal town — whether it’s the Hamptons, South of France, St. Barts, Sardinia — all have those things.”

In 2007, the tech tycoon bought the Casa Malibu Inn — a small hotel on the Pacific Coast Highway that had been in operation for more than 60 years — for $20 million, eventually turning the vintage motel into the first location of the Nobu Ryokan brand with partners Robert De Niro and film producer Meir Teper.

That same year, Ellison also purchased the Malibu Racquet Club, an exclusive tennis facility frequented by celebrities such as Pierce Brosnan, for $6.9 million. When he’s in town, Ellison plays with Trey Waltke, a former tennis pro who beat the likes of John McEnroe and Jimmy Connors.

“It started as a personal love and then as an opportunity to really improve an already beautiful place and do so in a way that was respectful to the environment,” Rappaport said. “Someone else would have done gargantuan development. He builds the bare minimum.”

Still, there’s room for improvement. Ellison can’t be happy that there’s still a Jack in the Box restaurant directly opposite the pier, one local quipped.

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