The Agency’s Santiago Arana Tells His Bottom-Up Story

Santiago Arana can peer out of his corner office window in Brentwood and point to where Argentine steakhouse Gaucho Grill once sat.

That’s where he met luxury agent Rodrigo Iglesias, then at Sotheby’s International Realty, who became a mentor for Arana at a time when he was hustling to hold down double shifts at high-end restaurants, while trying to grow a flailing career as a residential agent.

Today, Arana’s office is a testament to how far he’s come. Articles of his accolades and interviews hang framed on the wall. He serves as principal at The Agency with career sales of $4.8 billion.

Arana’s client list is a who’s who of Hollywood: Lady Gaga, Ben Affleck, Jennifer Lopez, LeBron James, Larry David, Anthony Hopkins, Rick Caruso and the “Bond King” Jeffrey Gundlach.

568 Tigertail Road, which sold to LeBron James for $23 million in 2018 (Neue Focus)

The Real Deal sat down with Arana in his Brentwood office to talk about his childhood in Bolivia, his move to Santa Barbara, hours of door-knocking and the ups and downs of spec home development.

What was your childhood in Bolivia like?

It was a pretty amazing childhood. Just the simplicity of being in a small town where, at the age of 6, I had a key to my house and I walked to school and at 10, 12, 13, we could just all grab our bikes and leave on Saturday morning and not come back until the night.

Now that I have four children and I live in a city like L.A., it makes you realize how much more complicated it’s gotten. Yes, you have a lot of great opportunities by being in the city, but for what I like, that childhood was precious.

Out of college, you got a job at the National Institute of Statistics. How did that go?

I was 22 and, and I was like, “What do I do now?” So, I found an opportunity to work at the National Institute of Statistics through a friend of my dad.

So I started working and I didn’t know what to do. You’re sitting at a computer, and they handed me a bunch of papers and said, “Fill this information into this file.” It was boring and it wasn’t really getting me excited, but I was getting paid.

What moved you out of that situation?

The situation in my country, it’s always up and down. At that time, it was difficult. Where I was working was two blocks from the main plaza where the government ran. I was sitting at my desk, and I started hearing shooting. They tried to kill the president and the army went to defend the president. Over 100 people died that day.

I got out of the office, and I saw people running in the streets and all this craziness. I remember going back home. I called my dad and I said, “This is nuts.” But then, that day in 2002, the current president of Bolivia, Gonzalo Sanchez, escaped and went to Miami. And then another person became president and then another person, and it just became a very difficult time.

So, I told my dad until things settle down, maybe it’ll be good if I do my master’s degree and then come back when things are calm with a better resume and then probably get a better job in the private sector.

After you received a scholarship for a master’s program in finance taught only in English, how did you end up in Santa Barbara?

I didn’t speak a word of English. My mom called this aunt of mine living in Santa Barbara, and she said I could come and crash on her couch for eight months. I packed my bag. I had $125 and flew here.

I was going to an ESL program at night that was for free. In the meantime, I ran out of that money really quick, and my aunt didn’t have money to give me. So, she’s like, “Hey, you gotta get a job.”

So, I got a job as a busboy at a place in Montecito. Then once I picked up English, I started waiting tables. I waited on Oprah, Brad Pitt, Kevin Costner.

It was a different world. There were a lot of wealthy guys coming in their Ferraris and it opened my eyes to a world that I was never exposed to.

What was the best advice your aunt gave you when you first moved to the U.S.?

First of all, she stopped talking in Spanish to me the first week. She said “I’m going to get you settled. I’m going to show you the house. I’ll show you the bus stops. And then next week, I’m not speaking Spanish with you anymore.” That helped me learn English a lot faster.

Her pushing me to go and get a job was something I didn’t really want to do. She Americanized me because in Bolivia, when I was living there, I was middle class: you go to work, you go to college, you live with your parents, you save a bunch of money, and then you go and buy your house, and then you’re on your own. Here, it’s different: you get out of high school, you’re on your own. So, for me, that was a shock.

She taught me to work and do whatever it takes. If you need to clean bathrooms, you need to clean bathrooms. If you need to clean tables, you need to clean tables. You’ve got to do what you’ve got to do.

How did you get into real estate?

[After] I made the decision to stay [in the U.S.] and be with my wife, I started looking for different jobs: insurance companies, life insurance companies and a couple of factories and they were offering me jobs where they were paying less than what I was making in cash in the restaurants.

Then I just researched, if I am a top real estate agent in L.A., what kind of money are these people making? And it was more attractive, so I decided to jump into real estate.

It was rough. I would do real estate in the morning. At 10:30 a.m. I’d go check in at McCormick & Schmidt’s in Beverly Hills. Make $60, $80 and then go back to real estate, door knocking for a couple hours. Then I’d go for the night shift in Santa Monica to the Water Grill.

I did that for about four and a half years.

Were you closing deals during that time?

The first year I didn’t sell anything. Then one of the waiters that I was working with at a restaurant in West Hollywood, he was trying to be an actor. He got tired of that, and he said he was going back to Australia. He asked, “Would you be interested in selling my house?”

He had a condo in West Hollywood that I sold for $420,000 and that was my first one. It took another year to sell the next one, so I was like, “This is not sustainable.”

Then someone told me about this guy, Rodrigo Iglesias. I researched him, I found him and I was trying to meet with him for three, four months.

I was driving to work, and his assistant called, “Mr. Iglesias has an opening in the next hour.” I called the restaurant and said I was sick, and they weren’t happy.

So, I came to Gaucho Grill [in Brentwood], sit at the restaurant at 4 o’clock and wait for him for an hour and a half. He doesn’t show up. I’m so upset and disappointed. I drink an ice tea because I didn’t want to spend money.

As I’m leaving, I get a phone call. It’s him: “Santiago, I want to apologize. To be honest, I got a phone call that distracted me, and I forgot.”

He said, “Let me make it up to you. Can you meet me tomorrow? I’ll buy you lunch.” Sure. Same place.

The first thing he said was “I don’t need an assistant. I have four assistants. I can’t offer you a job.” I said, “I don’t need a job.” At this point, I’m talking in Spanish with him. He’s from Argentina. I’m from Bolivia. “I just need advice.”

We built a relationship. He started giving me advice and I got a call for a listing for $1.7 million. I was like, “Holy shit. How can I secure this?” I called him and asked if he would share it, so we sold it together. I was very grateful to him. Then I got another call for a $5 million house in Beverly Hills, so I called him again.

I was open to sharing. I wanted to secure 50 cents of $1 rather than zero. So, we did that a few times. I was at Keller Williams, and he said, “Why don’t you just come work at Sotheby’s, close to me?” He became a mentor. Long story short, we became 50/50 partners and I started to do really well.

And then 2008 came.

The market crashed. I had quit the restaurant, and the savings were getting low. And I thought, “I’ve got to go back to wait tables. I have two kids; I need to put food on the table.”

I drove to Venice. At the time Gjelina just opened and it was the hottest place to make the biggest tips. I’m about to go in, filled out the application and I’m in my car. Something inside me said, “What the hell are you doing? You can’t go back. You’ve just got to push through and somehow make it work.”

I got in my car, and I went to Brentwood Park, my favorite neighborhood here, and I went door-knocking for two and a half hours. I don’t know if anything came out of that, but it was the energy I put out there.

From that point on, in the midst of 2008 and ’09, I actually started getting calls. Granted, I was sitting at open houses Saturday and Sunday, other people’s open houses and I was in people’s face. And as things started changing in 2011; my business took off.

How did you get into development?

Because I’m on the front lines with the buyers, it allows me to give that knowledge [of what buyers want] to the developers. And they like me because their houses sell faster. I find them properties and I calculate the numbers: If you buy this house in this location for this much and you build a house for this much, this is what the market is going to support you to sell it for. I understood from A to Z.

What I wanted to study when I was in high school was architecture. But people said architects are going out of business because computers are replacing them, which was bullshit. So, I suppressed that. My passion really is more artistic. I love the design of houses, and that’s why I design houses now. So, I kind of came full circle unintentionally.

565 Tigertail Road, which sold to Petra Ecclestone in 2019 for $22.7 million (Neue Focus)

What was your first spec deal?

I found this property that I really, really liked here in Brentwood, and I knew exactly what I needed to do. It was an empty lot, and I saw the house in my head. The guy that bought this property for $4 million called; he bought the property with his dad. They got in a fight and he’s moving to Arizona. He said, “I want to get rid of the lot we just bought three weeks ago.”

He wanted $5.2 [million]. So, I went and looked at it. You can build a house for $5 [million]. You buy for $5 [million] and you can sell it for $16 [million] no problem, because I just sold the house across the street for $16 [million] with no views and this one was on the hillside.

I showed it to three developers, and they said, “You’re not going to sell this for $16 [million]. No way.” Two of them were like, “Why would I pay him $1.2 million more than what he just bought it for?” They got hung up on not wanting to pay this guy. Who cares if you have to pay $1 million more if you’re actually going to make money? You didn’t buy it three weeks ago.

I called David [Herskowitz, his now partner in Cutting Edge Development] and said, “I want to show you something.” I told him my vision and he said, “Let’s do it.”

So we built that house and we ended up selling it to LeBron James for $25 [million]. That was 2018.

That was my first big home, and then I did another six homes after that, and I’m finishing one right now [slated to be ready in Spring 2025], all within this general area, all in Brentwood. Most of them on Tigertail [Road].

How soon might you develop outside of California?

It’s not that far [off], because what they they’re doing here in California with all these taxes, they’re just killing it. Like with [Measure] ULA, for example.

It came into place after I bought this property. So, when I underwrote my property and my numbers, that was not part of the deal.

Now that’s going to cost me $2 million out of my profit. And, what’s stupid about that is, let’s say I build a house and I sell it at a loss, I still need to pay 5.5 percent of the sale price. So, I have to borrow money to pay the tax and I make zero.

I don’t have a problem paying a fee on the profit. Sure, I’ll give you a piece, but if I lost money, why would I have to pay?

I can tell you right now that’s the biggest problem we have. That has taken out of the market probably 70 percent of the developers. A lot of people are going and doing something else or building in other places, because they make it so difficult here.

If you go to places like Texas and Florida, they actually want you to come and develop. They want new houses. They help you. They have incentives and the taxes are low.

If you could sit down with the City Council or the Planning Commission, what would you tell them?

If I had the opportunity to sit down with someone that has the willingness to listen and to make sense of something, yes, but to sit down and talk to someone that doesn’t – I mean, I’d rather sit down and talk to my plant.

What’s next for you in terms of something new that you want to learn or pursue?

Just to find a market where I can do more creative stuff, more spec homes in a more friendly environment.

Something that I definitely want to do in the future, is maybe a boutique hotel in a destination. Maybe a boutique hotel somewhere in Mexico, where I can implement surfing and biking.

Do you ever visualize your retirement?

I visualize almost every night. I visualize my long-term goals and, yes, I visualize what retirement would look like, which is not really retirement. I like to always be doing something, but I would like to get to a point where I am doing what I like the most.