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US$150m plot of land hits Bel Air market, house not included

New York

YOU can build your dream home from scratch just across from the Hotel Bel Air in Los Angeles.

You will just need a little over US$14 million per acre for the land. Three parcels totalling 10.6 acres, all with the necessary permits to build a 60,000-square-foot house apiece, have just become available in the trendy Bel Air neighbourhood.

The area is home to a combination of billionaires (Rupert Murdoch's ranch and winery was singed by the recent Skirball fire), and celebrities including Beyonce and Jay Z, who bought a US$88 million house in 2017.

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The property's history is not nearly as glitzy. Twenty years ago, the land, which is directly across the street from the Hotel Bel Air, was carved into eight separate lots.

A single individual began to acquire them one by one, and then sold all of them to the developer Domvs London and Junius Real Estate Partners, the real estate investment arm of JPMorgan Chase in 2014.

The partners immediately rezoned the tract into three, larger properties, and tried to sell one, measuring three acres, for US$45 million in 2015.  The property sat on the market for a year, and then the owners took it off the market.

Four years later, the land is pristine, levelled, and back on sale, this time with a price tag of US$150 million for the entire 10.6 acres.

"If someone wants to buy one of the three (original, three acre) individual lots, we can discuss that with them," Barry Watts, the president of Domvs, said. "But we found the property appeals to people more as a legacy purchase - we have had more inquiries from people saying 'I want to buy the whole property'."

The land is listed with Connie Blankenship, a broker with Douglas Elliman. Mr Watts said that they've spent "tens of millions" of dollars improving the land.

The land, he continued, "is what we in the industry call 'shovel ready'. " Those shovels have licence to go unusually deep for the area. "One of the key benefits is you can also build a large subterranean level," he said.

Last year, the median price for a home in the area was US$3.2 million, according to a report by Douglas Elliman, but the neighbourhood is home to some of Los Angeles' more outrageous properties.

There's a 38,000-sq-ft spec home that comes with a decommissioned helicopter on sale for US$150 million; a US$49.9 million mansion with 20,000 sq-ft of underground space; and "Chartwell", a 10-acre estate used in the Beverly Hillbillies, currently on sale for a mere US$245 million.

Domvs has already commissioned renderings for a new house to rival its neighbours, plans for which can be included in the sale. The property has views of the city, the ocean, and, on a clear day, Catalina Island off the coast. 

The listing comes during a modest downswing in LA's real estate market, where inventory is rising and homes are taking longer to sell.

In Bel Air, the average sales price was down nearly 21 per cent year over year during the fourth quarter of 2018, according to a report by Douglas Elliman, which noted that "the number of sales jumped as negotiability expanded sharply."

When the first Bel Air plot was listed, its price broke down to US$15 million an acre. Today, even after all the improvements Mr Watts said he's done to the land, the price has been reduced to just over US$14 million an acre.

"We have actually priced this extremely competitively," he said. "We're looking to avoid what other developers have done, which is to set the price really really high and then come down. We see ourselves as an intelligent investment group." 

For contrast, there's currently a 1.88 acre, undeveloped tract in Bel Air on sale for US$47.5 million, or US$26.4 million an acre; nearby, there's a 1.41 acre plot of land on sale for US$19.95 million, or US$14 million an acre. BLOOMBERG