As was first reported by the folks over at The Real Deal, there is a very large transaction about to close in prime Bel Air. And yes, it is quite outrageous and all too shocking.
The deal involves a sublime 1.88-acre promontory property that sports views overlooking Century City, the Pacific Ocean, and a wide swathe of the LA basin. Pending court approval, the sale will very soon close for $44,000,000 in cash.
$44 million is a lot of dough by anyone’s standards, of course, but the sum itself is nothing particularly record-breaking. Lest y’all forget, a nearby compound — also in Bel Air — sold earlier this year for $85 million. And as everyone knows, a house on Malibu’s Carbon Beach went for a record-smashing $110 million a couple months back. But this sale is just as monstrous in its own right.
Why? Because the parcel is totally vacant! The buyer is paying $44 million for 1.88 acres of dirt. And that’s pretty crazy — in fact, Yolanda believes this may be the most ever paid for a vacant residential parcel in LA. Feel free to correct us if we’re wrong, y’all. There was a $50 million land sale in Malibu last year, but that was for a huge 24-acre property divvied up into six different mega-mansion lots. Today’s spread will accommodate just one supersized mansion.
Anyway, this property was not always home-less. Years ago there was a sprawling (and not particularly attractive) single-story residence on the lot. After many years of ownership by the same family, the house fell into a state of disrepair and neglect. Peter Morton bought that place back in June 2012 for exactly $25 million. (Back then, people thought that was a lot of money. How quickly times change, eh?)
Eventually ol’ Petey demolished the house and tore out all the landscaping. He then regraded the empty property and installed retaining walls in preparation for a big new spec-mansion. But then something happened. We’re not sure if Mr. Morton lost interest in the project or if he simply seized an opportunity to make easy money, but records reveal that he sold the estate for $36,000,000 in February 2017.
The buyer then was the infamous (and now bankrupt) Woodbridge, a Ponzi scheme masquerading as an investment group. Those folks went belly-up late last year and have since begun unloading their real estate holdings as part of bankruptcy proceedings. In addition to this Bel Air spread, they have sold one Hidden Hills mansion for $15 million (to NBA star DeMar DeRozan), a vacant lot (also in Hidden Hills) for about $10 million to a developer, and a large apartment complex in the Valley.
During their heyday, Woodbridge snapped up dozens of sublime LA properties and nearly always overpaid. So Yolanda is absolutely shocked, confounded, aghast that someone is now paying $8 million more than they forked over last year. And for an unchanged vacant lot! Wow.
Court documents show that realtor Tomer Fridman repped both the seller and the buyer in this transaction. For that he will haul in a gross commission check of more than $1.3 million. Not too shabby!
But we digress. Once the sale is approved and actually closes, the new owner will be “Elite Investment Management LLC”, a little-known local developer. Behind the LLC front is a man named Jonathan Menlo, a grandson of wealthy real estate tycoon (and alleged slumlord) Sam Menlo. Back in the day, Mr. Menlo — whose family firm owns an empire comprised of thousands of apartment units and nursing home beds — was ordered to live in one of his own apartment units as punishment.
Elite and the younger Mr. Menlo already own a smaller development property on nearby Chalon Road — records reveal they paid $13,500,000 for that Bel Air site last year. Their contemporary spec-mansion over yonder is partially completed.
So why would Mr. Menlo have paid so much for this new estate? Perhaps it is because this parcel is (literally) right down the street from Nile Niami’s under-construction magnum opus: The One. It has been widely reported that Mr. Niami plans to list his 100,000-square-foot monster spec-compound for sale with a $500 million pricetag upon completion. Presumably Mr. Menlo and Elite likewise see the value in building a trophy mega-mansion on their $44 million promontory. Heck, if they can sell the completed house for $100 million or more, their investment will have handily paid off.
But do folks willing to spend $100+ million on a big LA spec-mansion actually exist?
Ever the skeptic, Yolanda is not yet convinced of that. Oh sure, there are plenty of successful developers betting heavily that LA will soon become a haven for nine-figure compounds, and we’re just a silly old lady typing on a keyboard. We are just judging based on what we see in the marketplace — and what we see is that nobody is buying that “Billionaire” nightmare over on Bel Air Road. The Chartwell estate still hasn’t sold. And Nile Niami’s Opus sex house in Trousdale — originally listed at $100 million more than a year ago — is now priced at $77 million. And still no takers. So who, and where, are these phantom buyers?
That is just the devil’s advocate in us, kiddies. We realize that Mr. Menlo and Mr. Niami are experts and probably know what they are doing. Yolanda may be eating crow this time next year. So pour yourself a nice cup of tea, put your feet up, and let’s see what happens. Either way, it will be entertaining.
Listing and selling agent: Tomer Fridman, Compass