A powerful force in the ever-evolving Beverly Hills real estate market, The Agency's Director of Real Estate, Peter Mack, specializes in luxury investment and speculative properties. Here, Peter shares his expert insights on this vibrant market, the impact of the ULA bill, the influx of foreign buyers, and provides a comprehensive look at the opportunities and challenges shaping the distinctive 90210 zip code.
Given your expertise, what trends are you currently seeing in the Beverly Hills market and how do you expect these trends to shape future real estate and investment opportunities?
Since the ULA Act came into force in Los Angeles, the Beverly Hills housing market has been booming like never before. There are more luxury homes on the market and buyers are reassured that these properties are not affected by the ULA, so sales are expected to be strong.
Since the end of 2023, we have witnessed many foreign buyers buying luxury properties in Beverly Hills and investing in Los Angeles. I have witnessed about 3-4 different groups buying properties worth about $100 million each.
From your experience, what are some important considerations for investors and buyers looking to enter the Beverly Hills real estate market?
One important consideration is to make sure you buy in the right Beverly Hills location so that if you ever need to sell again your ULA will be waived. At this point we don't know if the ULA will survive or be voided, but it's certainly something to keep in mind.
Another important consideration is to make sure the property you have your eye on has good usable land, because in Beverly Hills, that kind of land is always in high demand. Finally, make sure you work with a good broker who has access to all the very quiet off-market properties, because that's where you'll usually find the best properties and deals.
Can you talk a little bit about your most successful sale in Beverly Hills? What unique strategies or factors do you think contributed to your success?
I had an out of state client looking for a great resale property in Beverly Hills. He was a total newbie to the Los Angeles market, and Beverly Hills in particular. He wanted a deal. I found a great home for him on a great lot on Angelo Drive (I can't give you the exact address due to a non-disclosure agreement). The price was $3 million and he was very skeptical. I broke down the numbers for him, detailed every cost from A to Z, and showed him how much square footage he could add. At the end of the sheet, he knew he'd make a tidy profit.
He was still skeptical because he was just guessing, but I backed up the numbers with hard data and he was able to see the potential. Long story short, we bought it for $3M, he spent $1M for a total of $4M, and two years later he sold it for $6.5M. A very happy client.
As an expert in luxury investment and spec properties, how do you navigate the complexities of the Los Angeles real estate market and what do you think are the characteristics of successful developments and properties in the area?
Every area in Los Angeles is very different, but one thing that's the same everywhere is money. Whether it's a good investment or not can be determined by simple math. That's easier said than done, since there's a lot of speculation involved.
So the more knowledge you have as a developer or broker, the more confidence you can have in your speculation. One tip I always share is know your buyer. That means no matter what property you are trying to spec, you need to identify who your buyer is. Then it will be easier to target your property to that buyer.
For example, if you are buying a property on a hill with a great view, make sure it is mostly for single people rather than families, making it more attractive to investors who can rent it out and expect a large cash flow.
On the other hand, if you are buying a flat to cater for your family, ensure there is some segregation for in-laws and nannies. Make sure the property has great elements for entertaining guests but overall has a great layout and flow for your family.
As a trusted industry resource, how do you stay informed about the latest trends and opportunities in the Los Angeles real estate industry, and how do you use that knowledge to benefit your clients?
I try to stay close with all my colleagues who do a lot of development. I also stay in touch with all my developer clients and friends. I spend a lot of time analyzing old deals from start to finish to learn more about the economy. This knowledge is essential when I need to educate my clients. Having all this knowledge allows me to find great development deals and match them with clients in my network. So I'm a matchmaker. A lot of my clients didn't start out as developers from the get-go, and I help them navigate that process.
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