From TRD Los Angeles: Third time’s the charm, right?
Either way, don’t hold your breath: Beyoncé and Jay Z may have made a $120 million offer on a spec home in Bel Air — their third reported offer on a Los Angeles home since 2014 — but the deal is far from sealed.
In fact, the home at 454 Cuesta Way, which was listed at $135 million, has not yet been completed, said Jeff Hyland of Hilton & Hyland, the brokerage that holds the listing.
If the golden couple of music closes on the property, they’d shatter the record for the most expensive home ever purchased in L.A. But few in the residential real estate industry would be fazed, it seems.
“From now on, every time there’s a major high-end sale, it will break the existing record,” Hyland said. “The bar keeps getting raised.”
Hardly two months after Daren Metropoulos became the first buyer to break the nine-digit threshold with his $100 million purchase of the Playboy Mansion, billionaire Tom Gores matched the price point with a two-acre Holmby Hills spec house.
The latter property on Carolwood Drive, several brokers say, serves as a point of comparison for Bey and Jay’s prospective new home.
A $120 million price tag might seem steep, but it accurately reflects the continued strength of the L.A. luxury housing market following those deals, Coldwell Banker agent Christophe Choo told The Real Deal.
On the Westside alone, he said, there have been 19 homes sold for prices over $20 million in the first quarter of 2017 — that’s up 380 percent compared to this time last year.
The apparently Beyoncé-worthy property at hand, located in Bel Air’s prestigious East Gate area, is a spectacle in and of itself.
The eight-bedroom, 11-bathroom spread was designed by Irish architect Paul McClean, who designed at least three of the 10 priciest homes sold in L.A. last year. The six-structure compound totals 30,000 square feet with eight bedrooms, 11 bathrooms, four pools, a basketball court, a recording studio, a spa, staff quarters and limestone floors.
“It’s got beautiful scale, beautiful volume,” said Hyland, who recently toured the behemoth site.
“It’s open and airy with indoor-outdoor living where you push a button and all the huge, heavy doors fall into the walls seamlessly, as if they were never there, opening up to the gardens and the pools,” broker Dolly Lenz told Realtor.com earlier this week.
It took developr Tyrone McKillen — who is also the listing broker on the property under Hilton & Hyland’s banner — and his firm McKillen Developments about four years to complete the house, Hyland said. McKillen purchased the site for $15 million in 2013, when it was still occupied by a 9,400-square-foot Colonial Revival residence built in 1928.
“They tore it all down [and] did the existing house a favor,” Hyland said.
McKillen, a real estate mogul-in-the-making, is a “busy guy who wears two hats,” Hyland said of the developer and broker, who ranked 14th on TRD’s latest ranking of L.A.’s top luxury agents.
The son of billionaire Irish developer Paddy McKillen, he is behind McKillen Developments and Plus Development LLC, a firm that pursues residential, multifamily, hospitality, and retail projects, according to its website.
“These guys do great work,” said Compass agent Greg Harris, who lives down the road from McKillen.
If 454 Cuesta Way goes to Beyoncé and Jay Z, it wouldn’t be the young Irish broker’s first celebrity transaction. Along with Drew Fenton, he brokered the sale of the 9,300-square-foot Birds Street home that Calvin Klein purchased for $25 million in 2015. The estate was developed by McKillen’s brother, Dean, who is one of his regular business partners.
Plus Development, which McKillen co-founded with Christopher Carlin, has more than a dozen luxury residential projects in the works right now, according to its website. They include a property just down the street from 454 Cuesta at 642 St. Cloud, which is being marketed as a ready-to-build site with the plans already drawn up. It is listed for $24 million.
For some of his projects, McKillen will “buy the property, get it entitled and designed, and then sell it without building it,” Harris said. “I think it’s a little bit of a leap of faith.”
Hyland described him as “an honest, low-key guy.”
McKillen and his associates declined to comment for this story.
Bey and Jay’s reported offer has the industry abuzz with optimism.
When a property is this high-end, “a price is only discretionary,” Choo said. “I don’t think there’s any rhyme or reason [to the price tag].”
Doubters say these properties won’t sell when they hit the market, but they ultimately do, he argued.
Still, if McKillen’s mega-mansion sells, it would be a triumph against the sky-high odds.
“[Developers] may have understood the model when it was an under-$10 million model,” Douglas Elliman broker Tracy Maltas told TRD last month. “But when you get to north of $35 million, there’s a whole other procedure to building it and selling it.”
Beyond the upfront costs, developers must consider the new regulations against so-called “McMansions” and the steep interest to stomach if the property lingers on the market.
And as for Beyoncé and Jay Z, it’s about time they found a long-term home in L.A.
Last spring, they were rumored to have made a $49 million bid on a 14,000-square-foot mansion in Beverly Hills but were outbid by designer Tom Ford, and in 2014, they were allegedly outbid by Minecraft billionaire Markus Persson on a home built by Bruce Makowsky.
These failed attempts may be what accounts for their drastic hike in budget, Hyland speculated.
“I think at some point, Beyoncé turned to Jay Z and said, ‘Shawn Carter, let’s just do this. Let’s settle down.’”