A formidable force in the ever-evolving Beverly Hills real estate market, Peter Mac, Director of The Agency’s Estates Division, specializes in high-end investment and speculative properties. Here, Peter shares his expert insight on this thriving market, the impact of Measure ULA, and the influx of foreign buyers, providing a comprehensive look at the opportunities and challenges shaping the distinctive 90210 zip code.
Given your expertise, what trends are you currently observing in the Beverly Hills market? And how do you anticipate these trends shaping future real estate and investment opportunities?
Ever since Measure ULA (United to House Los Angeles) hit L.A., we have seen a stronger market in proper Beverly Hills than ever before. There are more high-end homes on the market, and they are expected to sell well because buyers are reassured that these properties were not affected by ULA.
Since the end of 2023, we have observed many foreign buyers purchasing luxury properties in Beverly Hills, particularly from Hong Kong, who are investing their money here in L.A. I have witnessed about three to four different groups, each purchasing properties worth around $100 million.
In your experience, what are some key considerations for investors and/or buyers looking to enter the Beverly Hills real estate market?
One of the key considerations is to make sure to buy in proper Beverly Hills because then you are exempt from ULA when you need to sell it again. As of now, we don’t know if ULA will stick around or get overturned; however, it is certainly something to keep in mind.
Another key consideration is to ensure that whichever property you are eyeing has good, usable land, as that is always in very high demand in Beverly Hills. Lastly, make sure you work with a great broker who has access to all the ultra-quiet off-market listings. That is typically where you find the best properties and deals.
Can you share some insights into your most successful sales in Beverly Hills? What unique strategies or factors do you think contributed to their success?
I had an out-of-state client who was looking for a great flip in Beverly Hills. He was completely new to the L.A. market and Beverly Hills in particular. He wanted a deal. I found him a great house on a great lot on Angelo Drive (I can’t share the exact address because of an NDA). The price tag was $3M, and he was very skeptical. I broke down the numbers for him, detailing all the costs from A to Z and how much extra square footage he could add. At the end of the sheet, he could see he would make a substantial profit.
He was still skeptical since we were speculating, but I backed my numbers up with solid data, and he could then see the potential himself. Long story short, we bought it for $3M, he spent $1M, so all in $4M, and he sold it for $6.5M two years later. That was one happy client.
As a specialist in high-end investment and spec properties, how do you navigate the complexities of the Los Angeles real estate market, and what do you believe sets apart successful developments and properties in this area?
Each area in Los Angeles is so different from the others, but one thing that is the same everywhere is money. It’s just math to find out if it’s a good investment or not. Easier said than done, since we are dealing with a lot of speculation.
Hence, the more knowledge you have as a developer and broker, the more comfortable you become in your speculations. One tip I always share is knowing your buyer. This means that whichever property you are trying to spec out, make sure to identify your buyer because it will become easier to target the property to that buyer.
For example, if you are buying a view property in the hills, do not cater to a family. Instead, cater to a bachelor with a lot of wow factors and ensure the property appeals to investors who would rent it out for great cash flow.
On the other hand, if you are buying in the Flats and catering to a family, make sure there is some kind of separation for the in-laws and nanny. Ensure the property still has a good wow factor for entertaining but, overall, has a great floor plan and flow for the family.
As a trusted resource in the industry, how do you stay informed about the latest developments and opportunities in the Los Angeles real estate landscape, and how do you leverage this knowledge to benefit your clients?
I make sure to stay in close contact with all my colleagues who do a lot of developments, and I also keep in touch with all my developer clients and friends. I spend a lot of time analyzing older deals from start to finish to learn more about the economics. This knowledge is crucial when I need to educate my clients. By gaining all this knowledge, I become capable of finding great development deals and then pairing them with clients in my network. So, I am matchmaking. Many of my clients do not start out as developers, but I help them navigate the process.
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