As Pacific Palisades remains in the throes of its long road to recovery after last year’s wildfire, The Beverly Hills Estates is staking its own claim on the rebuild.
The luxury residential real estate firm, as well as social club, has launched a dedicated division – The Palisades Estates – aimed at capturing sales and steering redevelopment in the neighborhood, where the Palisades Fire destroyed nearly 7,000 homes and left thousands of residents displaced.
The new division, formally created in November, is being led by longtime Palisades and West L.A. agent Jacqueline Chernov, who left Compass in the aftermath of the fire to join The Beverly Hills Estates. A decade-long specialist in new construction in the neighborhood, Chernov said she has just as much as a personal investment in the area’s recovery – she lost two homes to the blaze herself.
“I was the biggest advocate of the Palisades (that) there could be,” Chernov said. “I felt it was just an utopic environment … We had all the stores you would ever want and nice restaurants. Just the community of people here is second to none.”
Before the fire, Pacific Palisades made up roughly 20% to 30% of The Beverly Hills Estates’ overall business, said President Branden Williams, who co-founded the agency with Chief Executive Rayni Williams. The firm still holds the record for the highest ever sale in the neighborhood — the $83 million transfer of 1601 San Onofre Drive to cryptocurrency billionaire Austin Russell in 2021.
“We absolutely love the Palisades,” Branden Williams said. “We were always planning on opening an office (there), but (the fire) gave us more incentive because we want to be part of the rebuild of the Palisades. We’re very optimistic about it.”
Diverse real estate portfolio
Since its inception, The Palisades Estates has sold more than $250 million worth of real estate in the Palisades and has grown to encompass 10 people.
“The first half of the year after the fires was pretty grim,” Chernov said. “I lost almost all my business because it all burned down. Until (the) summer, it was really, really difficult, and now I’m really, really busy.”
The majority of The Palisades Estates’ listings right now are empty lots, which are mostly going to home developers, Chernov said. That includes companies such as JNY Development, GME Development, Shelter Homes and Sowa Development for redevelopment, although the brokerage’s overall portfolio is quite varied.
Some of these lots are going directly to end users, and Chernov is also selling some of the new construction homes that are just now hitting the market, plus a few smoke-damaged homes that never got remediated. Beyond the initial sale, Chernov said she also helps clientsby providing resources for architects and developers, and she emphasizes her unique ability to empathize with her clientele.
“I’m at a time where I can be a real asset to people, and I’m being optimistic and trying to be a resource for the people in the community in helping them rebuild and get back on their feet,” she said. “(Even) if it’s just a shoulder to cry on and complain about insurance, I’m going through the same thing myself, so I have a certain closeness with the clients that I talk to because I’m feeling their pain.”
According to Chernov, an undisclosed portion of the commission proceeds from every sale will be donated to Steadfast LA, the nonprofit coalition founded by Rick Caruso last year to accelerate rebuilding efforts across fire-affected regions.
Changing the landscape
Despite tremendous community engagement in rebuilding, only a handful of new construction homes have hit the market since last year.
“People don’t realize how much work goes into the planning and design process of building your own home,” said Steven Somers, chief executive of Sawtelle-based Crest Real Estate, a land-use advisory and permit-expediting firm.
Somers noted that fire victims had to quickly determine where to live, where their children would attend school, and in the end, whether they would return to their neighborhood to rebuild.
“After they decided all of that, they needed to think about what style of house they want to build, what size house they want to build (and) what their insurance payment is going to look like,” he said, adding that those who’re rebuilding typically contend with a six-to-eight month design and engineering process “before you even get to the city.”
Somers works quite closely with Chernov and The Beverly Hills Estates, with Chernov bringing Crest in on their transactions to help her clients understand what they can build on the properties that they’re buying. Currently, the two are collaborating on dozens of projects, and both share a passion for rebuilding the coastal neighborhood.
Crest has always had a very strong presence in Pacific Palisades – historically permitting more than 300 projects to date, he said. That number spiked after the fires to the point that Crest has created a new division, dedicated solely to fire rebuilds and mainly representing owners of existing real estate in the neighborhood.
Somers’ team helps clients understand the true potential of their allocated land, in accordance with zoning code allowances, and works closely with government officials to streamline the process. Somers said one of Crest’s key accomplishments was lifting the threshold that limited rebuilt homes to 110% of their orginal size, allowing owners to build bigger houses and secure permits for new designs in about eight weeks.
“I really think that has been a massive benefit for those people in the Palisades to give them more flexibility in decision making and frankly to make all this make more financial sense for them as well,” Somers said. “They’re making a huge investment back into these properties.”
Beyond size, Somers said the average house will be more fire-resistant and remain architecturally diverse – with styles ranging from traditional Spanish to contemporary designs, and everything in between.
For Somers, the pace and momentum of rebuilding are strong. Rather, the more pertinent challenges homeowners face include navigating insurance costs, the lack of developer confidence in Pacific Palisades’ short-term value and the amount of construction underway, which can affect logistics planning.
Chernov added that another challenge is the buyer-seller disconnect over fair home values, and that the market is still being set. The inclusion of the ULA tax on these sales widens the gap further, and if the tax is ultimately reversed, Chernov said it will significantly help expedite sales in the Palisades.
“We’re just about a year out, and I am very confident that there’s a wave coming of projects that are going to be under construction by the midpoint of this year,” Somers said.
“People are going to realize that things weren’t moving slowly. They were happening behind closed doors.”
Varied agency sentiments
But while The Beverly Hills Estates and Crest are betting big on the return of Pacific Palisades, other agencies are a bit more hesitant about what it really means to move back just yet.
“It seems that most of our clients in the Palisades are buying or leasing places outside the Palisades,” said Michael Nourmand, president and broker-owner of Beverly Hills-based Nourmand & Associates, also a popular boutique residential brokerage firm with a heavy Westside presence. “They want to come back, but they don’t want to be in the Palisades. The wound is too fresh, and they don’t want to be somewhere up in the hills.”
While Nourmand said his firm is doing a lot of business with people whose homes burned down in the Palisades Fire, most of that business is focused on relocating clients – with Santa Monica, Brentwood, Holmby Hills and Beverly Hills all being popular alternatives.
“There’s a market for (the Palisades), but I think there are still a fair amount of people that don’t have it on their radar right now,” Nourmand said. “They don’t want to be next to burnt lots and construction. They don’t want to be in an area that’s rebuilding. They would prefer to buy something one neighborhood over.”
On the plus side, because of all the construction and chaos, land in the Palisades is heavily discounted – costing 30% to 50% less than the purchase price before the fires, according to data from Realtor.com. First-time home buyers or people who previously couldn’t afford to purchase in the Palisades now have an enticing opportunity. But with fewer community members physically present, experts point out that the environment can take a toll on raising a family in the area.
“(There’s a big) fear of the lack of certainty (related to) what the experience of living there is actually going to look like,” said Kyle Draper, chief executive of Serene Team | LPT Realty Inc., a residential real estate agency based in Culver City that markets throughout Southern California. “If you have kids, are things going to be back to normal (in) three years, five years, eight years? And then what’s the cost of your 8-year-old spending (ages) 8 to 15 in construction world?”
Draper and his team have completed multiple transactions in both Pacific Palisades and Altadena since the fires, with their business spiking due to the sheer number of people who became displaced. They’ve found mixed sentiments across the board regarding clients returning home.
“It’s so situational,” Draper said. “Everybody just has their unique circumstance. We’ve seen people that are committed to the rebuild and staying, (and) we’ve seen plenty that are just looking to move out … It very much feels that the majority of the people who are purchasing right now are doing it as a long-term play and that they were already part of the community, and they’re excited to take part in that.”
More coming from TBHE
One of the ways that Chernov is working to incentivize families to move back to the Palisades is by partnering with a developer to build a residential showroom.
While details of the deal are still being finalized, the concept would allow clients to come in, chat with the developer about their goals, see what the actual product would look like and quickly choose finishes.
“Having a showroom is a really great idea because clients are looking for builders, and they like to see a product that the builder has done,” Chernov said. “If you have a competitive price with good quality … I think it’s going to do really well.”
Currently, the only developer with a showroom in the Palisades is Thomas James Homes, and Chernov said this partnership would be a higher-end alternative that her team would run directly. She said that, together, they want to prioritize rebuilding the Alphabet Streets — the homes right around the village, since residential and commercial tend to follow each other.
But The Beverly Hills Estates’ confidence in the Palisades signifies only the first of other divisions to come. According to Branden Williams, the agency is currently looking into office space in Malibu, with the Eastside and the Valley to follow. The goal is to have five satellite offices open within approximately two years, Williams said.
“It’s great to have more brand awareness all over the city,” he said.
In remaining a true boutique firm, Williams said that staying small and hyper-local allows them to provide more specialized service.
“We’re trying to be the exact opposite of Coldwell Banker and all these bigger firms,” he said. “We want to provide the best boutique experience you can (have) and really be experienced (and) knowledgeable about all our neighborhoods and where we sell.”
Playing the long game
As rain continues to pour in Los Angeles and excavators pave the way for new residential units, the general sentiment about the long-term vitality of Pacific Palisades seems quite positive.
“The bad part about Los Angeles is that people have short-term memory, and the goodpart about Los Angeles is that people have short-term memory,” Nourmand said. “I think it’s going to take some time, but I do think the Palisades will recover, and I do think it’ll be a very desirable place. But it’ll take years; it’s not going to happen overnight.”
Somers added that “five years from now, the amount of civic pride that people in the Palisades are going to feel every single day is going to be truly incredible … These people are really pioneers who are going forward right now with the understanding that probably two years from now, it may not be the most wonderful place to live, but they see the vision of the future.”
For those who are patient enough to reap the benefits, an investment opportunity awaits.
“I’m excited for Palisades Estates,” Chernov said. “I really want to find a big enough office space so that we can expand and have a lot of troops on the ground in the area. Certain areas are busier than others, and eventually the overflow will just go to the rest. It’s just going to take time.”
