In another life, Beverly Hills real estate broker Stephen Shapiro may have taken over his family business operating a small chain of movie theaters in Lower Merion, Pa. But Shapiro always knew such a life wasn’t for him, so when his father sold the business while Shapiro was in college, he joined a generation of young people moving West. When Shapiro arrived in Los Angeles in 1969, he didn’t know anyone, but by the end of the decade he was hobnobbing with celebrities and famous businessmen, first leasing and later brokering sales of their lavish properties. Shapiro, 64, went on to found Westside Estate Agency Inc., which handles luxury home sales from Hollywood to Malibu. Among his clients have been Hot Rock Café entrepreneur Peter Morton and movie producer Steve Tisch, whom he now calls best friends. After four decades in the business, Shapiro thought he had seen it all – until the current down market, which he thinks could get worse. Still, the veteran broker has sold about a half-dozen $10 million-plus homes this year. And he recently sold for an undisclosed price the Bel-Air mansion of Nicolas Cage; the sale is still in escrow. Shapiro, who has two children with his second wife, recently sat down with the Business Journal at his Beverly Hills office to discuss his life, career and the epic hikes he takes to clear his head.
Question: So how bad is the luxury home business?
Answer: I’ve been through this three or four times. Up until this recession – I don’t call it a recession, I call it a global economic meltdown – (inexperienced brokers) would go back to their old jobs. Except now their old jobs don’t exist. Of the 50 people that are licensed here, there are a bunch that don’t do any deals at all. There are people in every office like that. They will have to do something else that will earn them money.
Q: So how are you holding up?
A: I’m holding up fine. Blessedly, after 30-plus years, I have clients that thrive during all economic times. Over the course of various different recessionary periods those people have used the opportunity to acquire real estate assets at beneficial pricings.
Q: Can you quantify that?
A: Even in a bad year like this, I’ve done one, two, three, four, five – maybe six deals – over $10 million. I am doing what I like to refer to as my disproportionate share of the business.
Q: So when is the market going to turn around?
A: I don’t think it’s good. If people read this, they will maybe tend to disagree with me. But there are a lot of houses in the foreclosure pipeline between Hollywood and Malibu. A lot. When your next-door neighbor’s house sells at a reduced price your house is worth less. I’m afraid that is going to continue to happen.
Q: Since you work with celebrity and high-net-worth clients, you must have some great stories to share.
A: You won’t see us in Hot Properties. We kind of keep away from that type of thing because it just begets more. I’ve got this Nicolas Cage listing, and if I don’t get 20 calls a week from “Inside Edition” or whatever those shows are, saying, “Come in, we will take pictures, we will put you on air.” The people that we deal with are primarily not in-front-of-the-camera talent, we are dealing with behind-the-camera talent. Those people don’t want publicity. They don’t need people to know they spend $10 million for a house. We try to keep it as private as possible.
Q: But a few years back your firm did have a reality show of your own, “Really Rich Real Estate,” on VH1.
A: It was interesting from the point of view that I negotiated complete creative control. It was unlike “Million Dollar Listing,” which I think is one of the funniest shows I’ve ever seen with the three guys self-destructing and making real estate people look like idiots. It’s funny. I wouldn’t allow any of that stuff. We had decent ratings. We didn’t have any angst on that show. It wasn’t salacious.
Q: Not a single salacious story?
A: We had one agent who had a famous rock and roll drummer and took him out and during the course of the day, took him to an ear, nose and throat doctor to get his nose sucked out from cocaine abuse. And they wanted that on the air. And I said, “Not happening.” After the first season was over they said, “Well, unless you are going to open this up. ...” I said, “I am not going to open this up.”
Q: You have done deals for billionaire Kirk Kerkorian. What was that like?
A: He’s somebody that I admire, respect and learned a lot from. I did learn a whole lot of ego tempering from him.
Q: What do you mean?
A: The first time I interacted with him, my secretary buzzed me and said, “There is a Kirk Kerkorian on the phone,” and I assumed it was his secretary. It wasn’t; it was him. He taught me what my position is, who I am working for, and to get back to people to make them feel they are the most important people in your life. He told me that you should return every call within two hours. From dealing with him, I immediately stopped having people screen my calls. If someone is calling me, it’s for real estate. Why not just be accessible?
Q: Do you remember you first really big deal?
A: There was one very influential client, Shep Gordon. He was a major music business manager. He had Luther Vandross, Alice Cooper; he had Blondie. He had a lot of big acts. And as I am to some people today, I was his go-to guy. He was my first big sale. It was late 1970s, early 1980s. He had a big house in Brentwood; it was a Paul Williams on two and a half rolling acres – it was beautiful. He called me and he said, “I need you to sell the house and I need you to sell it this week. I am going to file for divorce and I want it sold before I go through the divorce proceedings.” I sold it in a week for around $3 million. And that’s where it started. He would refer me to people. It’s a business of referrals; it’s a business of trust.
Q: You grew up around Philadelphia. How did you end up in Los Angeles?
A: The first time I came to California in the late 1960s I worked for a rental car company washing cars on Sunset Boulevard during the heyday of Sunset Boulevard. It was wild. Then I went back to Philadelphia to finish school. I graduated from Temple in 1969. And then (the rental car company) offered me a job working for them, so I came back to L.A., and managed the car wash facility at LAX, listening to 747s take off and land all day and watched for people stealing cars.
Q: That’s a long way from selling $10 million homes.
A: After quitting that job I went to work for an insurance company. You have to make 100 calls a day to strangers and ask them if they want to buy insurance or set up a meeting for estate planning and blah, blah. I was always kind of shy growing up so I didn’t enjoy calling strangers and trying to sell them something. I was forced to make these calls. It broke me from that shyness. I was there until they moved me to Pasadena.
Q: Did that get you into real estate?
A: I had an apartment near University High – I was driving from West L.A. – and I hated it. It was dreadful. I looked at the ads in the paper (for an apartment closer to Pasadena). The apartments sounded great and you’d go to the apartment and it was terrible. It wasn’t anything close. If they said bright and cheery, it was dark and dank.
Q: I take it you saw a business opportunity.
A: Being that I had this background with my father owning theaters, I came up with this idea where we took 35 mm slides of vacant apartments and offered a service to the landlord that we would show the apartments on slides to prospective people and then send them over with a slip and if they rented it, they (the landlords) would pay me one-third of the first month’s rent. We would advertise to prospective lessees that we were offering this service. The company was called Scan-A-Pad. This is 1971. At one point we worked with about 250 potential lessees a day. We opened an office in Sherman Oaks.
Q: What became of Scan-A-Pad?
A: Over a relatively short period of time, the vacancy factor turned around and there wasn’t any vacancy factor. So the landlords didn’t need to pay anything to fill their vacancies so it kind of went its natural course. But I kept it a while, while I opened another company called the Moving Experience, which was a high-end home rental company. I saw the brokers here weren’t paying any attention to leases because they didn’t get as much money.
Q: What kind of clients did you have?
A: The people I wanted to approach were coming into town to make a movie or a record – at that time the record business was booming. Peter Frampton or the Bee Gees would come in or the Rolling Stones and they’d want a house not a hotel. I had a limousine and we used to take them around in a limo and show them the houses. It was wild. We had amazing clients.
Q: Did you start selling them homes?
A: Ultimately, they started to inquire about buying houses. I started to run into clients that were working with other people for sale. The broker I would run into the most was Stan Herman. He would have the sales of houses that I had for leases. The reason I was able to get leases is because I would tell these (brokers) I wouldn’t compete with them for the sale. (People) could list it for sale with Stan Herman and for lease with me and he wouldn’t feel threatened. We worked together for quite a while. In the late 1980s, I acquired half the company and it became Stan Herman, Stephen Shapiro and Associates.
Q: You later went off and founded your current business. What does it take to be successful selling luxury homes?
A: I offer calmness. I never get unnerved. I offer complete lack of intimidation. Nobody can intimidate me. There is nothing anybody can do to me. I’m not doing anything illegal, I am not going to go to jail, I am not cheating on my wife, I’m not doing any of those things. So I can’t be intimidated. We don’t live from deal to deal. We don’t need to make a deal with you today to pay last month’s car payment.
Q: That’s it?
A: The other thing I do for all my clients is eliminate them from the turmoil of the deal. They don’t need to know that I am fighting over a roof issue for them. All they need to know is that they’ve got somebody in their corner taking care of this stuff.
Q: You’ve got a second family. How is that different from the first time around?
A: I learned that being with your family is more important than being at an event. I choose to have dinner with the kids; hang out with the kids. As opposed to the days when Spago was on Sunset, I was at Spago two days a week, Morton’s three days a week. I was doing deals at the restaurants. I was out every night. I wasn’t paying the attention I should have been.
Q: What about all the sports memorabilia on your office walls?
A: I’m a basketball junkie. I love basketball. My father took me to a game when I was very young. Philadelphia Warriors against the Celtics or something. I played basketball as a kid. I got my son Max into basketball very early. He was for a long time the only player that started for four years on the varsity team at Beverly Hills High School.
Q: Are you a Lakers fan?
A: It’s a complicated relationship. I was not a Lakers fan when Shaq was playing because the game was too predictable. I was a big Lakers fan when Wilt was with the Lakers and they won their 33 straight. I had season tickets then. I loved that – I was very close with Pat Riley at that period of time.
Q: I hear you are a big hiker.
A: Just yesterday I hiked Mount Baldy – 10,068 feet. A month ago I hiked the Grand Canyon from rim to rim, nonstop. It was the seventh or eighth time I’ve done the Grand Canyon. My stockbroker got me into it. I hadn’t done it for three years and this year we decided to do it again so I started to train in July. We would do long weekend hikes. It’s great – amazing exercise. It’s fun. It’s nice to be away for five or six hours, or in the case of the Grand Canyon, 36 hours by the time you go out.
Q: What’s your next adventure?
A: Next week we are doing Mount San Jacinto, which is the fifth largest vertical climb in North America. Then I am done for a while. I’m in as good shape now at 64 as I have ever been in my life. I had my body fat tested last week: It is 10.7 percent. I feel incredible. I’m told with what I’ve done I could do Kilimanjaro at a certain time of year.
Q: So are you going to do Kilimanjaro?
A: After the hiking is done next week I will probably do something else. What I’ve learned in life and in business, if you have a goal, then you train for that goal.
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