NOTE: (Yolanda wanted to write about something a wee bit offbeat today. We’ll be back to our regularly scheduled programming soon, we promise).
Close your eyes, think really hard, and you all may recall a simpler time back in the day. It wasn’t so long ago, really. We’re talking back in 2007. Obama hadn’t yet entered the Oval Office, but Yolanda was still collecting social security. And back then, there weren’t $100 million mega-mansion sales closing left and right and Starship Enterprise-looking hilltop contemporaries fetching $70 million in cash.
Houses were still going like hotcakes, of course. In 2007, home values were wildly inflated and hurtling toward a Niagara Falls-sized price precipice with alarming alacrity. Yet even the most optimistic onlookers — those who didn’t see the oncoming recession through their rose-tinted real estate glasses — could not have anticipated the dramatic upswing of a roller-coaster ride in home values that was to come over the next decade. And certainly not the outrageously expensive real estate that has defined 2017.
A recent market report from real estate data aggregator CoreLogic highlights the fact that the median home value in Los Angeles County has officially tied the pre-recession high-water mark set in summer 2007. In some tony neighborhoods, however, that record was surpassed months or even years ago. Values have skyrocketed without regard to wage increases, taxes, or political events. And Yolanda really can’t think of an neighborhood that illustrates that dramatic upswing better than a certain area of Beverly Hills. Today we’ve picked a particular property out there that y’all might find intriguing — not for the architectural quality of the (demolished) house itself, but just because of the major-league profits all its (many) recent owners have made on the land without doing anything besides holding the deed, basically. Let’s set the scene.
In 2007, a wealthy British entrepreneur named Peter Jones forked over $7,470,000 for a ho-hum mid-century house near the tippy-top of Hillcrest Drive in the fiendishly expensive Trousdale Estates neighborhood of Beverly Hills. From what we recall, the single-story 1958 structure had four bedrooms, a circular motorcourt and a pool.
It seems, however, that our British boy soon tired of his Bev Hills house. Or maybe he just wanted to make a quick profit off it? Who knows. But poor Mr. Jones tried to unload the beotch for several years during the recession. Yolanda recalls the house was listed at 9.something million during 2009 and 2010. The price inexplicably jumped to an even-steven $10 million in 2011 before being removed from the market. It would seem that our guy had failed on his quest.
But then, lo and behold, here came a hedge-fund-rich east coast couple named Ed & Valerie Parisi. The Parisis, bless their wealthy hearts, plunked down a shocking $12,500,000 for the property in an off-market deal in March 2013.
$12.5 million?! That’s $2.5 million more than Mr. Jones’ last asking price! Can y’all imagine anything more outrageous? The nerve!
Did our Mr. Jones think he got super-lucky with these silly Parisi folks? Maybe. Probably. So Yolanda is pretty damn sure he was surprised when Mr. & Mrs. Parisi almost immediately demolished the existing house and then — in March 2014 — flipped the now-vacant land (in another off-market deal) for a staggering $15,000,000 to a globe-trotting scoundrel named Khadem Al Qubaisi.
Mr. Al Qubaisi – an Emirati by birth — was likely more concerned about getting his ill-gotten billions into a relatively safe haven (like US real estate) than he was about overpaying for a one-acre patch of prime Beverly Hills land by a couple million bucks. The car-collecting fellow (he reportedly owned no fewer than four different $2 million Bugattis during his high-flying days in the 2012-2015 time frame) essentially left the plot of land untouched during his period of ownership.
Right around this time was when the ginormous deals really started to roll in. Bruce Makowsky sold his spec mansion a couple doors away for a logic-defying $70,000,000 (in cash) to Minecraft billionaire Markus Persson. And then the house next door – a sprawling Mexican-influenced mid-century on a similarly-sized one-acre lot – sold for $35,300,000 to hedge funder David Kabiller. As a teardown, mind you.
So with those sorts of sales, why couldn’t this property command a similarly nonsensical pricetag?
Why not, indeed? In summer 2016, Mr. Al Qubaisi ran into some serious legal trouble and his Hillcrest vacant lot was seized by the US Department of Justice (as was his $30+ million Beverly Hills mansion, but we digress). At the time of seizure, the property was already quietly in escrow. After some twisting and tuggin’, the DoJ allowed the sale to go through and the property transferred for $22,400,000 to a private equity bazillionaire named Alex Soltani.
At the time of the sale, Yolanda figured Mr. Soltani might be wanting to build himself a sumptuous trophy compound. An homage to his exceptionally hefty bank account, if you will. But it was not to be!
Property records shockingly show that a mere two months he acquired the lot – in December 2016 – Mr. Soltani flipped the vacant property in yet another off-market deal for a faint-inducing $32,000,000. The buyer in this case was a corporate entity controlled by the family of a low-profile Thai businessman named Chatchaval Jiaravanon. Our Mr. Jiaravanon’s father, you may be interested to know, is a guy named Sumet Jiaravanon who happens to be a Bangkok-based multi-billionaire.
Think about that, kiddies. The ink was barely dry on the deed before Mr. Soltani earned himself a fat $9.6 million (before taxes and real estate fees) on this piece of dirt. If that’s not a reflection of how detached from reality this real estate market has become, we’re quite certain we don’t know what is.
Anyway, what Mr. Jiaravanon has planned with this land remains to be seen for certain – but Yolanda can only imagine he’ll eventually try to flip it yet again for another fat profit. It’s what the previous four owners did, after all. And it worked out quite well for them, wouldn’t y’all say?
And after all, the asking prices keep getting crazier. The house next door, a spec mega-mansion created by spec mega-mansion specialist Nile Niami, is named “Opus” (lol) and is listed for a breathtaking $100 million. It hasn’t sold yet, of course, but if it does and if it goes for anywhere near the ask…
Yolanda wonders if there is something these billionaires know about upper Hillcrest drive that we have yet to learn. Is there a gold mine buried up there? A copious supply of oil burbling below the surface? And will their relentless enthusiasm for this cul-de-sac be dimmed when the market goes through yet another dive ‘n dip in the future?
Remember, kids — history has a strange way of repeating itself.