Penthouse Condo’s Price Floors Rivals

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Penthouse Condo’s Price Floors Rivals
On Way Up: Paul White

If you have $50 million to spend on a home in Los Angeles and care more about lifestyle and prestige than acreage, a penthouse in a high-rise might be the ticket.

Unfortunately, it’s taken.

The only penthouse ever to be offered at that price in Los Angeles has already been reserved via a $1.2 million down payment. The 12,000-square-foot condominium will be the pièce de résistance of the 12-story, 59-unit Four Seasons Private Residences Los Angeles, a Beverly Hills-adjacent condominium project at 9000 W. Third St., which is around the corner from the Four Seasons Los Angeles at Beverly Hills hotel.

The amenity-heavy project, from West Hollywood developer Genton Property Group and Four Seasons Private Residences, the residential arm of the Toronto-headquartered global hotel chain, will break ground next month.

The most expensive penthouse in L.A. history will occupy the entire top floor and include the 9,000-square-foot roof of the property, which no other residents will be able to access, allowing for a customizable private garden, with, say, an orange grove as well as a glass-bottomed swimming pool, the location for which was chosen after architecture firm RTKL conducted studies on where sunlight hits the roof every day of the year.

Monthly fees for the penthouse will run $5,000 a month, about 25 percent more than the fees at most other luxury condo projects in Los Angeles. They will cover, among other things, an on-call chef to cook meals and an on-call trainer to tone glutes in the privacy of your condo (or in training rooms downstairs at a 3,100-square-foot gym designed by celebrity trainer Harley Pasternak); access to a “director’s cut” movie theater; and the use of a “Great Room,” where residents can host catered parties that spill onto the building’s shared pool deck. The purchase of the penthouse also will include a private, guarded entrance to a six-car garage that will lead directly to a private elevator to the unit, allowing owners to remain unseen by, say, the paparazzi, as they ascend to the private roof with views from downtown Los Angeles to the South Bay.

Before the project was marketed or even publicized, 30 percent of the units were reserved, a full two years before move-in. Larger units, including the penthouse and the $18 million to $20 million half-floor flats, have seen more interest than the less expensive units, the cheapest of which costs $2.5 million. Half-floor units will run around 5,000 square feet, plus a 400-square-foot deck – $3,600 to $4,000 a square foot for living spaces. (The median price per foot for a condo in Los Angeles County in June was $353 a foot.) The smallest unit in the building will be 1,300 square feet, more than $1,900 a square foot.

Many familiar with the luxury condo circuit say the demand for this kind of high-end project in Los Angeles is high because there’s very little new product and high-net-worth buyers with primary residences elsewhere seek exclusivity and a hassle-free lifestyle.

“To sum it up, we offer every imaginable amenity,” said Paul White, senior vice president of residential for Four Seasons Hotels and Resorts.

“It mimics (having) a private staff in your residence,” said Jonathan Genton, founding partner of Genton Property Group. “No one who has made a reservation has questioned the price because if you want that level of service, this is what you get.”

Cost of exclusivity

When Candy Spelling, widow of television producer Aaron Spelling and mother of actress Tori Spelling, sold the 56,000-square-foot Spelling Manor – which had three rooms explicitly for the purpose of gift-wrapping – and downsized to an 18,000-square-foot penthouse at Related Co.’s Century project in Century City in 2010, the $35 million price tag took most people’s breath away.

The Spelling condo will remain the priciest in Los Angeles – until the Four Seasons unit closes.

The project was designed to be exclusive, which is shorthand for expensive. It was entitled for 90 units, but Genton sought a higher return by building fewer units and selling at a higher price.

The developers weren’t looking to match the pricing of other condos in Los Angeles. They aimed to rise above it, looking to New York, where Four Seasons residences trade in excess of $60 million.

“We were looking to set the bar,” White said, adding that a Four Seasons residence carries a “brand premium” in excess of 30 percent higher than the typical cost of a luxury property in that market.

“I’ve always thought of a penthouse as the ultimate home, the house at the top of the mountain,” said Steve Heiferman of Hilton & Highland, who created the Luxury Condominium Group with his wife, Karen, in 1978 and has specialized in selling luxury condos on the Westside ever since. “If you went back in history, the person at the top of the mountain had the biggest home. … So part of the attraction to the penthouse is bragging rights.”

Privacy is part of the exclusivity factor and a lot of that is in the design. At the Four Seasons Private Residences Los Angeles, all buyers have the option for private garages, said Kelly Farrell, a vice president at RTKL. There will be no need to hit the lobby for any amenity on offer, she said, leaving paparazzi in the dark. The project was designed above grade, so that even the lower units will be taller than the site lines of people in nearby houses. Additionally, every unit will have a patio landscaped for privacy, such as a hedge. The shared pool deck was designed in a way to prevent views of residents’ private roof decks. Given the low-rise to mid-rise nature of the area, no one will be able to see up to the penthouse roof, which will be closed in by collapsible glass walls.

Who’s buying?

Condos are often associated with empty nesters. But Genton said most who have reserved, including the buyer who reserved the penthouse, will use their condo as a secondary residence.

“With rare exceptions, our (prospective) buyers already have a home in Los Angeles, but they also have two to three to four homes in other parts of the world,” he said.

Four Seasons will take care of property management while they are away, White said.

Both Genton and White were mum about who bought the penthouse.

“One of the things about the Four Seasons brand is that we’re highly discreet,” White said. “But what I can say is our (penthouse) buyers tend to be … ultra-high-net-worth individuals, from politicos to celebrities to (people in) entertainment and sports.”

Heiferman said that every penthouse deal he has ever completed was an all-cash deal.

“I sold one to a guy who owned wireless networks,” he said. “Sometimes it is rich widows, and in one case it was a very wealthy Eastern European buyer who wasn’t going to spend a lot of time there but thought it was a good place to park money.”

Penthouse buyers have varied backgrounds, but the common factor is wealth, he said.

“These are people who are not going to have to budget meals and eat Hamburger Helper for the next few years because of it,” Heiferman said. “I had one person who would pay the homeowners’ dues a year in advance, not because there was any bonus for that, it was just easier to write the check.”

Not everyone is convinced that the demand for luxury condos and penthouses is as strong as its proponents think.

“We are still a horizontal city as opposed to a vertical city,” said Stephen Shapiro of Westside Estate Agency, pointing to the Montage in Beverly Hills condos, which took years to sell out. “I’m skeptical about the Four Seasons because it’s not in the middle of anything. You can walk to Robertson (Boulevard) but you are walking by funky single-family homes and condos.”

Josh Flagg of Rodeo Realty and reality TV show “Million Dollar Listing” fame said Los Angeles remains a house city. He has seen penthouses sell for half their asking price.

“It’s a solid investment in New York. … It’s just not a good investment in L.A.,” he said.

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