After several years, and a lengthy legal process, a Los Angeles property tied to luxury real estate developer Mohamed Hadid has officially sold for $5 million, according to real estate agents familiar with the deal.
Found in Bel-Air, one of the wealthiest pockets of Los Angeles, the 1.2-acre property has been the center of controversy since it was revealed city building rules were circumvented to build a 30,000-square-foot mega-mansion on the site. As part of the sale, what remains of the existing structure will be demolished to create a clear path forward for future development, according to Hilton & Hyland’s Jonathan Nash, the luxury real estate specialist who sold the property.
“The sale signifies a new era for this infamous property, the future development of which will restore value and pedigree to one of L.A.’s premier residential locations,” Nash says.
According to Nash, the transaction—which came more than a decade after Hadid broke ground on the extravagant spec project—was challenging because of the legal entanglements. Unlike selling a piece of land, which is generally ready for development or sold raw, the property on Strada Vecchia Road had an existing structure that needed to come down.
“It took time to understand the resulting quantum of developable land, which deterred several buyers. The importance of an agent who not only understands how the court system works in respect to this kind of receivership sale but is also experienced with the nuances of land use is of paramount importance,” Nash explains.
Space has been Los Angeles’ hottest commodity during the pandemic, as residents new and old continue to reevaluate their living spaces and compete for the best properties. One phenomenon the agent points out is a complete disregard for the traditional real estate “comp” (def: comparable homes in a specific area that you are looking to buy or sell in).
“People aren’t necessarily valuing properties now based on their micro-locations, but are comparing properties to other comparable homes on a global and domestic scale. Now, with the high-net-worth buyer, it’s not necessarily a case of price-per-square-foot; it becomes more about what’s an appropriate price to pay for any given property,” he adds.
Nash points to Rupert Murdoch’s $200-million purchase of the Koch family ranch in Montana as a microcosm of the competition for the world’s best properties.
“UHNWIs (ultra-high-net-worth individuals) are looking for trophy locations across the country, no matter whether they’re in a big city or smaller locale. More and more, we see UHNW buyers creating these submarkets and paying big city prices for privacy and seclusion. As such, we’re comparing L.A. to London, to Tokyo, to Paris, and New York. What’s New York achieving versus Yellowstone versus another location. Ultimately, it comes down to a question: What is one of these individuals willing to pay for the perfect home wherever it may be?”
Since last year, the Southern California real estate market has exploded with an increase in property sales and prices. Housing sales are being fueled by people seeking additional space once their workplaces close due to the pandemic. Low mortgage rates have contributed to the rush on homes, while a lack of inventory continues to stoke competition.
In October, Southern California home prices jumped 14% year over year to $750,000, according to data supplied by the California Assoc. of Realtors. The median number of days on the market is 11, up two days from the previous year.
Hilton & Hyland is a founding member of Forbes Global Properties, a consumer marketplace and membership network of elite brokerages selling the world’s most luxurious homes.