Can Ryan Serhant Make it in California?

Market positioning is business 101. With this past week’s news that Ryan Serhant’s brokerage muscled its way into California, where does the business fit within California’s residential landscape?

Serhant said he’s identified no direct competitor among L.A.’s brokerage community.

Maybe that’s a flex, considering no company — especially one that’s branded around being a property tech firm — wants to compare itself to another when it’s new and trying to gain market share. In fact, Serhant said as much when he offered that it’s not about “acting and looking like everybody else.”

Instead, he flipped it to the individual agent level.

“What does a real estate agent do? They provide an individual service that is differentiated from their competition,” Serhant said. “It’s the agent’s opportunity to differentiate themselves and all I’ve seen the past couple of years are so many firms trying to blend in and be like everybody else.”

On the possibility of acquiring any local brokerages, Serhant offered, “I don’t know what the future holds.”

Thriving or surviving?

Ben Belack provided a more localized view on the subject of Serhant’s competition.

He would know after over a dozen years in Beverly Hills at The Agency. Belack decamped to join Serhant as executive vice president and one of 16 founding agents in California.

Scale for new entrants will be driven by the market’s continued consolidation and what Belack called a “flight to teams” with more of the business concentrated in the hands of a few.

“There’s so many different hats that [agents] wear, meaning we’re not just getting a listing,” Belack said. “We also have to shoot content and then who’s going to edit that, who’s going to be the transaction closer, who’s the prospector?”

Looking at the wave of brokerage start-ups in more recent years, one might say the window of opportunity for new entrants that can make a legit claim to boutique status has closed for the time being.

“There’s only one brokerage in town that can do and say that and that’s Carolwood [Estates],” Belack said. “Others may say on a listing appointment that they have a boutique feel and global reach, or some version of that, but I don’t think anyone in town is going to niche down and say, ‘We only serve this neighborhood,’ or ‘We only serve this price range,’ because there are less transactions being done overall as a result of interest rates and things like the mansion tax.”

Belack’s apparent point in bringing up Beverly Hills-based Carolwood, which has built a business around the Los Angeles high end, is that new entrants in the market, such as Serhant, have to cast a wider net to grow.

“For brokerages to succeed, they need market share and volume,” Belack said.

Measure ULA food for thought

Since Belack brought up Measure United to House L.A., there’s something more to consider.

This year’s been a real doozy for the so-called mansion tax. The city saw Councilmember and mayoral hopeful Nithya Raman propose for the June ballot a 15-year exemption from ULA on new multifamily, mixed-use and other commercial projects. That didn’t go anywhere, but the City Council is now considering possible ULA amendments to place on the November ballot via the newly established ad hoc committee. The main idea is to analyze the impact of ULA since its April 2023 rollout.

Interestingly, the most recent committee meeting on Friday spent a great deal of time mulling some $360 million in ULA funding for 80 affordable housing projects. The funding will now move to the full council.

With the ad hoc committee expected to dissolve June 1, how much focus will be dedicated to reviewing numbers on outcomes and how ULA funds have been used since the tax went into effect?

Big Deal

In transaction news, Resident Group and the Gambino Group at Compass closed on one of Los Angeles County’s priciest residential deals this year.

The former home of Bruce Willis, which is located at 1005 Benedict Canyon Drive, traded off market for $41.3 million, or $2,806 per square foot. The seller was Guess CEO Carlos Alberini and his wife Andrea Alberini, who bought the home for $16.5 million from a trust tied to Willis in 2014.

Resident’s Jon Grauman, Adam Rosenfeld and Bennett Bidwell represented the Alberinis. Carl Gambino and John Bercsi of the Gambino Group at Compass represented the mystery buyer.

The only other residential closing of this year that bests this past week’s sale price is 1111 Calle Vista Drive. That, too, sold off market for $47 million, or $4,569 per square foot.