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Wealthy homeowners seeking privacy are increasingly buying adjacent properties

Compounds are the hottest commodity in L.A.'s high-end real estate market, brokers say.

June 12, 2010|By Lauren Beale, Los Angeles Times

In the Middle Ages, moats were the thing. More recently, the rich have taken refuge behind tall hedges, view-obscuring walls and guarded gates.

But today's super-wealthy, seeking even greater privacy, are increasingly buying adjacent properties as a buffer zone around their mansions. And that's made the compound the hottest commodity on L.A.'s high-end market, real estate brokers say.

On the Westside, the growing list of compound owners includes movie industry titan Terry Semel, financier and producer Tom Gores and corporate housing kingpin Howard Ruby, founder of Oakwood Worldwide.

Divorcing Dodgers owners Frank and Jamie McCourt maintain two compounds, one in Holmby Hills and another in Malibu.

"If you don't have a neighbor anymore, you create more privacy," said Kurt Rappaport, co-founder of Westside Estate Agency, with offices in Beverly Hills and Malibu.

Not that the "buffer" homes are vacant. Some house family, friends, guests or staff. But these aren't mother-in-law cottages or little guesthouses like the one Kato Kaelin holed up in at O.J. Simpson's old place in Brentwood: Think multimillion-dollar mansions — next door, behind or even a few doors down.

The adjoining properties may be used during major fundraisers or large-scale entertaining, Rappaport said, to create more parking or as a place to stage the catering during lavish events. Some buyers have been known to tear down well-known homes for more elbow room.

Property records don't fully capture the trend. Owners typically want the flexibility of selling the parcels individually, and so they usually don't apply for a lot merger to create a formal compound. Still, veteran real estate agents say high-end buyers are increasingly looking to snap up adjoining properties.

"We've never seen this much activity going on," said Drew Mandile, who works as a team with Brooke Knapp at Sotheby's International Realty, specializing in Bel-Air.

Mandile and other agents said there were perhaps two or three compounds in Bel-Air 10 years ago. Today, there are at least nine.

"A decade ago, the idea of combining properties was extremely rare," Rappaport said. "Now in the ultra high end it's the norm to strategize about amassing multiple properties."

In part, the trend reflects an economic reality: The super-rich are getting super-richer, said Elizabeth Currid, an assistant professor at USC who studies cultural shifts among the wealthy. The average net worth of the world's billionaires increased $500 million in the last year to $3.5 billion, Forbes magazine reported in March.

"In a class-conscious society, people find new ways to demonstrate their status," Currid said. "The middle class may be able to buy Louis Vuitton bags and nice holidays, but they can't buy two mansions in Bel-Air. This is a way the global elite differentiate themselves."

The trend hasn't extended to other high-end Southern California areas such as Manhattan Beach, the Palos Verdes Peninsula and coastal Orange and San Diego counties, according to agents who specialize in luxury properties.

"We don't have as much of that type of wealth down here," said Greg Noonan, a veteran Prudential California Realty agent in La Jolla.

Along with more wealth, L.A.'s Westside also tends to have smaller lots, since many of the great old estates in the area were subdivided decades ago.

But it's not just billionaires who are buying the block. Among the new generation of L.A. compound-dwellers are actors and actresses yearning to live a paparazzi-free lifestyle, including Melanie Griffith and Antonio Banderas; Brad Pitt and Angelina Jolie; and Ben Stiller.

Baseball's McCourts are embroiled in a high-profile divorce, but in happier times they were among L.A.'s most active compound builders. The Bostonians were quick to assemble nearly five acres in Holmby Hills after their arrival in 2004. They purchased a Palladian-style villa of 20,000 square feet for about $25 million as a main residence and picked up the 8,400-square-foot mini-mansion next door before the year was out for $6.5 million.

They repeated their double play in Malibu three years later with the purchase of a John Lautner-designed architectural trophy home for more than $27 million, according to the Multiple Listing Service. The 5,500-square-foot Segel residence (yes, for that price it comes with a name) has about 80 feet of beachfront. The couple gained an additional 66 feet of sand months later by buying a smaller house next door for $19 million.

Agents to the elite such as Rappaport don't rely on luck to make these purchases possible.

"I have clients whose neighbors didn't have their homes on the market, and we turned them into sellers," he said, by paying substantially more than market value. One client in Malibu paid almost double for a lot next door that was valued at $6 million. The resulting compound is worth more than the separate properties were, Rappaport said.

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