Thursday, June 13, 2024

Can an LA condo set a $50M record? Agents say, why not?

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A new condo listing in Los Angeles is attempting to make a breakthrough in the luxury market by asking $50 million, a price never seen on condo properties in the City of Angels, The Wall Street Journal reported.

Cities like New York, Miami and Chicago much more regularly command condo sales in the $30 million to $50 million (or above) range. Take, for instance, Ken Griffin’s $238 million purchase of a penthouse at 220 Central Park South in Manhattan in 2019, as well as the Citadel CEO’s $60 million purchase of a Miami condo in 2015.

Meanwhile, LA’s condo sales record sits at just $34.8 million, a record that was set in 2010 when Candy Spelling, the widow of TV producer Aaron Spelling, purchased a penthouse at the Robert A.M. Stern-designed Century, then a new high-rise in Century City.

And now the Century will see if it can best its own record — and come that much closer to meeting the condo prices achieved by other leading cities in the U.S.

The new $50 million penthouse coming to market is about 9,400 square feet across three bedrooms and two terraces. Vicki Walters, the widow of real estate developer Raul Walters, is the seller, and Bachir Oueida of Douglas Elliman is representing the property.

The unit was purchased as raw space for $22.5 million in 2015. Since then, the interior has been made into something of a luxury oasis with a design by Matthew Boland of MMB Studio that includes custom lighting, a commercial-grade HVAC system (Walters liked to keep her floral arrangements fresh and cool), and elite finishes like onyx in the primary bathroom, a gold leaf ceiling in the private elevator gallery and custom lace and cashmere drapes.

In addition to those high-end touches, the unit also comes with a separate 1,200-square-foot office, a 500-square-foot studio, a private pool cabana and four private parking spaces.


The penthouse terrace | Hunter Kerhart


The elevator gallery features a gold leaf ceiling and lalique pieces that light up when the elevator arrives | Hunter Kerhart


If it sells for $50 million, the penthouse will set a new record for a condo sale in LA | Hunter Kerhart


The condo’s bar | Hunter Kerhart


The primary bathroom features onyx | Hunter Kerhart


The unit was originally sold as raw space in 2015 and was designed by Matthew Boland of MMB Studio | Hunter Kerhart


The condo features custom lace and cashmere drapes | Hunter Kerhart

But despite these luxurious features, it’s unclear if LA buyers will bite at that price, given the city’s condo sales track record and many buyers’ preference for single-family properties.

Billy Rose | The Agency

“Why would I ever consider sharing my walls, my ceiling, my floor, my elevators, my parking or my pool with anyone else?” Billy Rose of The Agency told The WSJ of luxury buyers’ general mentality when it comes to condos.

Unlike New York, Miami and Chicago, which have only a finite area in which to expand horizontally, LA has more girth in which to sprawl, which is partially why buyers in the area have a tendency to go after $50 million listings that include some kind of acreage and more private space instead of those atop a high rise with shared amenities.

Meanwhile, the city’s pricier condo listings have sat on the market, many seeing significant price cuts, too.

Two penthouses at 8899 Beverly Boulevard hit the market for $50 million in 2020, both of which have yet to sell.

A West Hollywood penthouse that private-equity heir Evan Metropoulos first listed for $58 million in 2018 ultimately sold three years later at a no-reserve auction for $17.5 million.

Similarly, a penthouse at the Four Seasons that was listed in July 2022 for $75 million is now asking just $37 million.

In recent years, the highest end of the condo market in LA has reached about $21 million — still a far cry from $50 million. Rihanna purchased a penthouse, also at the Century, for $21 million this year (the previous owner had paid $21.6 million in 2021). Likewise, a penthouse at the Pendry Residences in West Hollywood sold for $21.5 million in 2022.

As other sectors of the real estate market have slowed in the last year, so, too, has LA’s condo market. Luxury condo sales declined 13.1 percent on an annual basis during the third quarter of 2023, according to Miller Samuel. The median sales price also largely remained the same at $2.8 million during that same period. Meanwhile, luxury new development condo sales fell 25.9 percent year over year during Q3 2023 as the median sales price fell 5.9 percent to $3.7 million.

Stuart Vetterick | Hilton & Hyland

But given other conditions in the market right now, like high mortgage rates, low inventory and the ULA Tax, those declining sales figures don’t necessarily mean that luxury buyers are shying away from condos any more than other types of properties right now, Stuart Vetterick of Hilton & Hyland told Inman. Rather, it just shows that condo sales are in lockstep with the luxury market at-large.

Vetterick and Sally Forster Jones of the Sally Forster Jones Group at Compass told Inman that those who are skeptical of the new listing shouldn’t assume that the penthouse doesn’t stand a chance at $50 million just because of the city’s past condo sales history. Forster Jones said that condo living has gained in popularity in recent years as different types of buyers have sought to downsize for a variety of reasons, whether it’s because they’re aging and want less maintenance in a home or because their lifestyle involves more travel and they would like to be able to more easily lock and leave a property.

“It has all of the amenities and lifestyle that people are looking for,” Forster Jones said. “The focus has shifted, particularly in the $50 million or $20 million or $30 million [price range, condos] are becoming much, much more popular and much more of the focus. Buyers are looking for a lifestyle where they have security, good services, indoor-outdoor is very helpful for our Southern California market … But privacy, in the sense that it’s still kind of a community but where they’re feeling some privacy within their residence.”

To command a price like $50 million, Forster Jones added that a property would “really need to feel luxury” and provide a true alternative to estate living. In other words, to give up the estate, a luxury buyer would likely require the highest-end touches, quality craftsmanship, space (indoors and outdoors), hotel-like amenities and concierge services, a private elevator, and security. And giving up all the grounds maintenance and everything that goes with that is just another perk.

Sally Forster Jones | Sally Forster Jones Group

Forster Jones added that branded residences, like the Rosewood, Mandarin Oriental or Four Seasons, hold an additional appeal because buyers know they will offer the quality they’re looking for, and there’s a level of trust inherent in knowing the brand’s name and reputation.

Vetterick added that factors like what kind of view the condo unit has, whether or not it’s a full-floor unit (or has multiple floors) and if it has its own private water feature like a pool or hot tub can really make a difference when a buyer considers whether or not the unit is worth the price tag.

“Do I think it’s plausible?” Vetterick replied to the question of whether or not someone might actually pay $50 million for the penthouse. “Of course.”

“I would say anything’s possible in this market,” he continued. “We [just] set a record on the Dow. And the Fed is indicating that we’re going to be loosening interest rates, in terms of lowering them. I’ve heard economists say between 1 to 1.5 points. What does that do for the overall real estate market? It just sets it on fire. We’re already in a diminished capacity where we have very limited supply. So if you already have limited supply but then you have greater borrowing capacity, that only tends to drive prices up.”

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Email Lillian Dickerson

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