Putting a price on a Hollywood legend
Blockbuster deals are inspiring some homeowners to go for the gold. After the Playboy Mansion broke the nine-figure barrier in August 2016, homes that sold for mere millions in recent memory hit the market with asking prices in the tens of millions.
Market pros contend that price discovery is an even more delicate art these days, with seemingly more global billionaires than ever freely roaming the market, leading to mega-dollar signs in the eyes of sellers.
“The property starts at a price the seller wants, that’s not supported by real world conditions, and there doesn’t seem to be concern or shame that it’s significantly overpriced,” said Jonathan Miller, president and CEO of real estate appraiser Miller Samuel.
To further complicate matters, when a Los Angeles home has the whiff of Hollywood lore, the question of the right price gets dicier. Sellers and their brokers often find it tough to settle on an asking price for an incomparable home. The Playboy Mansion, for example, originally listed at $200 million in January 2016, before selling for a more than respectable $100 million.
“We had zero comps. I mean, it was the Playboy Mansion. It’s one of a kind on multiple levels,” said Gary Gold of Hilton & Hyland, the co-listing agent on the property with Drew Fenton of Hilton & Hyland and Mauricio Umansky of the Agency. “But when you have a seller with an asset and a buyer with money, and they go through the catharsis of coming together, more times than not they arrive at what the property really is worth.”
Many aspects of the deal were unusual, not least among them, Hugh Hefner. The founder of Playboy Enterprises will be allowed to continue living out his days on the property that his company purchased for $1.05 million in 1971.
Daren Metropoulos, who lived next door, bought the 1927 Arthur Rolland Kelly-designed Holmby Hills mansion, located on five acres at 10236 Charing Cross Road. A principal at the private-equity firm Metropoulos & Co., which owns Twinkie-maker Hostess Brands, he eventually plans to join the two estates, according to a statement on his website.
Hefner may be the poster boy for testing the limits of aspirational pricing on an incomparable home, but he is far from the only seller with the moxie to do so — and to have something to show for it.
Shortly after the Playboy Mansion deal closed, two more Holmby Hills trophy properties sold at or near the $100 million mark.
One of them, a spec house built on Barbra Streisand’s former estate at 301 North Carolwood Drive, listed in April 2016 for $150 million. It closed at$100 million in October, tying for first place with the Playboy Mansion in The Real Deal’s ranking of top residential sales. Along with the usual perks one expects at $2,631 per square foot, the listing mentioned a nail salon, massage rooms and an indoor water wall. The neighborhood is steeped in Hollywood history. The 38,000-square-foot mansion is situated directly across from Frank Sinatra’s former property and down the street from Walt Disney’s former home, the Carolwood Estate.
The property’s new owner, Tom Gores, is the chairman and CEO of Platinum Equity, a private equity firm that oversees more than two dozen companies with $6 billion in assets. He also owns the Detroit Pistons NBA team, among other interests, and currently ranks 194 on the Forbes 400 list. His niece Tiffany Martin of the Agency represented him in the part-cash, part land-trade deal.
Meanwhile, the legendary Owlwood estate, a 22-room mansion located at 141 South Carolwood Drive, flirted with the record books when it sold for $90 million in September — $60 million under the original asking price of $150 million, which seems to be the new normal for one-of-a-kind homes. At various times, the properties that were combined to create the 10-acre estate were home to such Hollywood legends as Jayne Mansfield, Tony Curtis and Esther Williams.
“Very wealthy international buyers from China, Singapore, India and Dubai were coming in, looking for a trophy property,” said listing agent Ann Dashiell of Douglas Elliman.
The Owlwood estate’s most famous former occupant — Cher — even stopped by for a tour. She and former husband Sonny Bono purchased the estate for $750,000 in 1974. Cher gained ownership of the house when the couple divorced and sold it to carpet business owner Ralph Mishkin for $950,000 in 1976. He named Owlwood after the birds on the property, and sold it for $4.2 million two years later to a businessman from Monaco, who later expanded the compound by 8.5 acres and sold it for $35 million in 2003.
Now Dawn Arnall, who purchased the property in 2003 with her late husband, the founder of the AmeriQuest Mortgage Company, has sold it to Bob Shapiro, the CEO of Woodbridge Luxury Homes. Real estate professionals believe that Shapiro plans to divide the estate into housing lots and sell them off one by one.
American fashion designer Tom Ford is yet another bold-faced name to purchase one of the year’s priciest homes. Brokers have known for some time that Ford, the director of “Nocturnal Animals,” was hunting for a new luxury property.
As TRD reported in September 2016, Ford made a $53 million off-market bid on a Beverly Hills estate owned by hotel developer Brad Korzen and interior designer Kelly Wearstler. The 3.2-acre, seven-bedroom house at 809 Hillcrest Road had been purchased by Korzen and Wearstler in 2005. The couple unsuccessfully listed the property in 2010 for $46 million, and again in 2012, by which time the asking price had dropped to $39 million.
Yet when Ford closed on a home a short while later, it was at a different deluxe address. He picked up the home once owned by Bloomingdale’s department store heiress and socialite Betsy Bloomingdale at 131 Delfern Drive in an off-market deal with her children, who had inherited the estate.
The 10,000-square-foot, nine-bedroom house was being shopped around at $55 million, but according to TheMLS, Ford picked it up for just shy of $39 million, putting it at number five in TRD’s ranking. It includes a distinctive red-walled library and a number of outdoor perks, including a pool house, swimming pool, outdoor living area and a tennis court. The house was built in the 1920s in the Spanish Colonial style, then remodeled in the 1950s by silent film actor and designer Billy Haines. Josh Flagg of Rodeo Realty Beverly Hills was the listing broker.
Another global business titan, Elon Musk, has been on a buying spree. In September, the SpaceX and Tesla CEO snapped up a $24 million off-market property in Bel Air that was in an unfinished state of remodeling. The 14,290-square-foot property, which is located at 954 Somera Road, is the fifth house Musk now owns overlooking the Bel Air Country Club, and his sixth in L.A. In December 2012, he began a string of purchases with a $17 million deal for a 20,000-square-foot house on Chalon Road in Bel Air, which has become his main residence.
Brokers say that even more properties are being shopped around at eye-popping prices. Take the Spelling mansion, for example. The property at 594 South Mapleton Drive — now owned by British heiress Petra Ecclestone Stunt — is currently listed at $200 million, which is $115 million more than its purchase price in July 2011. However, unlike many mansion listings in which pricing seems plucked out of thin air, the house, which was originally built by the late American film and TV producer Aaron Spelling in 1988, has at least undergone a substantial renovation.
Another residence raising eyebrows with its current asking price is 455 Lorraine Boulevard in L.A.’s Windsor Square neighborhood. The home was built in 1913 and afforded historic status not only for its Beaux-Arts style, but also for the slate of presidents — Eisenhower, Kennedy, Johnson and Nixon among them — who were guests of longtime owners Norman and Dorothy Chandler.
The 9,329-square-foot, six-bedroom, eight-bathroom house was sold by the Chandlers in July 1997 for about $2 million. Nigerian furniture magnate Robert Oshodin bought it for $9.5 million in June 2014. Pros doubt his improvements justify the current $50 million asking price.
“A lot of these asking prices are made-up numbers rather than being based on any comps,” Miller said. “It’s probably more common than we realize, because everybody is fixated on the top line number and not how the sausage is made.”