Two developers in California are trying to attract a buyer who is willing to make history in Los Angeles by paying between $50 million and $100 million for a condo. This would be a new record, as no condo in the city has ever sold for more than $22.5 million, according to public records.
The massive duplex apartment named "One LA", located at 9000 West 3rd Street in Beverly Hills, is on the market with a $75 million asking price. The penthouse, which occupies the top two floors of the Four Seasons Private Residences Los Angeles, was listed in July. The building is part of a luxurious 59-unit, 12-story condo project developed by Genton Development Company.
The Four Seasons Private Residences Los Angeles is the first standalone Four Seasons residence in North America and is located across from its namesake hotel. The crown jewel residence boasts approximately 13,000 square feet of indoor living space and 6,000 square feet of outdoor space, according to the building's website.
The penthouse, as shown in the marketing materials, is fully furnished, but in reality it will be sold as a "white-box" or unfinished shell without any kitchen, bathroom, millwork, or fixtures. Billy Rose, co-founder of The Agency RE and co-listing agent on the deal, is seen with his team in a marketing video riding bikes through the raw space. At the current asking price, the unfinished unit costs over $5,700 per square foot. According to Rose, finishing costs vary greatly depending on the buyer's preferences, but a rough estimate is around $8 million. Some buyers actually prefer this blank canvas so they can personalize the residence to their liking.
According to the building's website, the Four Seasons Private Residences Los Angeles offers in-residence dining and housekeeping services, a private 19-seat IMAX theater with access to new films and private screenings, a fitness center designed by celebrity nutritionist and trainer Harley Pasternak, a pool with private cabanas, and 24/7 support from Four Seasons staff.
Another luxurious penthouse aiming for the top of the real estate market in LA can be found at 8899 Beverly Blvd in West Hollywood. It has an asking price of $50 million, which can be increased to $100 million. Designed by architecture firm Olson Kundig, the 10-story building with 40 units was developed by Townscape Partners. The top floor is split into two penthouses of equal size, one on the east and the other on the west.
According to Fredrik Eklund of Douglas Elliman, who represents the development and recently gave CNBC a tour of penthouse east, the four-bedroom, five-bathroom residence has a size of approximately 6,450 sq ft and features 14-foot ceilings. The unit also has motorized glass panels that can be opened to provide access to an additional 1,500 sq ft of outdoor space on the wrap-around balcony. Unlike One LA, penthouse east will be delivered finished and is currently staged with furnishings by ASH Staging. These furnishings are not included in the $50 million asking price, which translates to over $7,700 per square foot.
The developer has yet to publicly list either of the two top-floor penthouses, but has been gauging interest in penthouse east since April. This was when the developer began promoting the unit with a $50 million price tag through a "whisper campaign," which is a term commonly used to describe off-market word-of-mouth marketing.
In this case, Townscape Partners and Eklund have been openly promoting the deal to the media for several months. They are also offering both top-floor penthouses as a combined package with an asking price of $100 million.
The owner of the two top-floor penthouses, combined, would occupy the prime location in West Hollywood. The penthouses combined offer 8 bedrooms, 10 bathrooms, and 4 kitchens (including a main kitchen and a separate kitchen for staff). Fredrik Eklund of Douglas Elliman stated that the combined interior space is approximately 13,000 sq ft, with an additional 6,000 sq ft of outdoor space. The building features a 12,000 sq ft outdoor area with a pool, fireplaces, and dining area, as well as a fitness area, a yoga studio, and an upcoming fine-dining restaurant.
The garage, referred to as "car stables" by broker Fredrik Eklund, is located on the underground level and boasts moody lighting, a herringbone-patterned tile floor, and parking spots hidden behind wooden and steel sliding doors. Eklund informed CNBC that purchasing two parking spots here costs $750,000. However, as part of the penthouse package, the developer would offer a few spots for free. Additionally, the garage also features a penthouse-exclusive private lobby with a view of the garage, comfortable seating, and elevators that transport guests straight to the top floor.
Will these pricey penthouses find a buyer?
The $100 million question is whether a buyer will be willing to pay that amount for a condo in LA. According to records analyzed by Jonathan Miller, the highest price ever achieved for a single-unit condo sale in LA was in 2015 when a 9,300 sq ft penthouse at The Century Condos in Century City sold for $22.5 million, which comes to $2,400 a sq ft. The Century, designed by Robert A.M. Stern Architects and completed in 2009, stands 42 stories tall and houses 140 units. It holds the record for the highest-priced condo sold last year, when actor Matthew Perry reportedly sold his 9,300 sq ft condo for $21.6 million, or $2,300 a sq ft. In 2010, TV producer Aaron Spelling's widow, Candy Spelling, broke a record when she spent $34.8 million on two contiguous units, which she later combined. This 15,500 sq ft mega-deal had a price per sq ft of nearly $2,250.
To reach the asking price, a potential buyer of either One LA or the penthouses at 8899 Beverly Blvd would need to make a significant departure from previous records set at The Century. Although Miller stated that real estate markets don't often see such drastic changes, this has happened before in LA with the ultra-luxury spec-mansions. Over the past 10 years, these homes have achieved sales surpassing $50 million, becoming a regular occurrence in the high-end spec market. According to Miller, this type of spike can occur when developers convince buyers that they have created a new and unique real estate product that warrants a premium price.
According to Miller, the new inventory of super-luxury condos in LA is the start of a new set of data. Rose refers to it as LA's condo inventory 2.0, which he says is more sophisticated, opulent, and equipped with more amenities than its predecessors. He believes that these factors contribute to the higher prices compared to previous waves, including the record-breaking sales at The Century Condos. The recent sale at The Pendry Residences in West Hollywood, another luxury condo project, supports Rose's theory. A 2,700 sq ft unit sold for $13 million, which is now the highest price per sq ft ever achieved for a condo in LA, more than double the price per sq ft reached in each of the top three sales at The Century Condo.
Eklund thinks his $100 million luxury listing could establish a new record in LA. He cites the example of the trophy condos in New York, which have sold for over $10,000 per sq ft. Despite this, data shows that over the past decade, more than 140 units in New York have sold for over $35 million, compared to none in LA. Miller cautions that the two condo markets are distinct and more transactions are needed to determine if this new market segment is sustainable. Developers of One LA and the penthouse units at 8899 Beverly are venturing into unknown territory, and it remains to be seen how consumers will respond.
Source : CNBC
Source : Four Seasons