9:00 AM PDT 6/30/2016 by Peter Kiefer
Summer means downtime for ballers, NFL stars and celebrities in search of short-term residences, boosting the profile of high-end properties - but not always the value: "I already saw this house on Instagram."
Every year, around Memorial Day, Beverly Hills-based real estate broker Lee Mintz is on the receiving end of a migration of millionaires. This gilded flock mainly consists of professional athletes, largely from the NFL and the NBA, who are eager for a few months of off-season California R&R. Her challenge is finding enough short-term premier listings to meet the burst of demand. The solution: Seek out gems that have sat idle on the market just long enough to make their owners and brokers a bit uncomfortable.
"The houses in Hollywood, Malibu and Beverly Hills are some of the most unique homes in the United States," says Mintz, an agent at Partners Trust who counts Rihanna, Kevin Durant and Ty Lawson as clients. "A lot of these homes have been sitting on the market for a while and can rent anywhere from $30,000 to $150,000 a month. So why wouldn't you do it?"
Michael shares the listing on this Sunset View Drive five-bedroom with an open floor plan, three-car garage and patio with full bar and outdoor bed. ($120K/month)
Take 1232 Sunset Plaza Drive: The three-structure Hagy Belzberg-designed estate has been listed for sale at $29.9 million for more than a year; now it can be yours for a cool $85,000 a month. Several miles south, you might opt for the eight-bedroom, 11-bath 200 Delfern Drive. The Mediterranean-style house hit the market in October for $45 million and now can be leased for $150,000 a month. The Agency's David Parnes, one of the property's listing agents, says inquiries are coming from high-net-worth individuals from Europe and the Middle East, the type of client who often travels with a large group. With a house, "they get more space and much more privacy [than at a hotel]," he says. "So it makes a lot of sense, even at these prices." Patrick Michael, founder and CEO of LA Estate Rental, says he recently showed a Beverly Park property asking more than $400,000 a month to a foreign dignitary.
The question is how these high-net-worth, often high-profile tenants can affect a home's ultimate sale. "For certain buyers, mostly foreign buyers and some of the new tech-money buyers, having a celebrity tenant associated with a listing can help market the property," says Cory Sheldon, an agent at Keller Williams who also manages some of his family's properties in the Hollywood Hills. "But for people who have lived in L.A. long enough, that sort of celebrity factor doesn't really move the needle."
For starters, tenant-inflicted wear and tear can be daunting, even if the name on the lease is an A-lister's. "Certain tenants can sometimes feel entitled because they are paying so much money, so they break the rules," says Michael, whose firm has found short-term housing for Dr. Dre and One Direction.
"If I have a client who is looking to sell their home and it is in the $10 million-to-$20 million range, my advice to them is to not rent it out," says Beverly Hills-based real estate broker Jill Epstein. "It hurts them because they are not selling a brand-new home anymore. Someone is going to be using those appliances; someone is going to be sitting on that toilet."
Beyonce and Jay Z reportedly leased this Holmby Hills spread for a month in 2014, when it was listed at $48 million. It sold in December for $30 million. ($200K/month)
And a star stay might not help market a property. After a string of visible tenants including Justin Bieber leased 6425 Weidlake Drive for $29,500 a month, the Hollywood Hills party house was listed for $50 million and hasn't yet sold. After Paris Hilton vacated her crash pad on PCH in Malibu, which she leased for $60,000 a month, it hit the market for $9 million. That house hasn't sold either. Not far from there, Caitlyn Jenner leased a house on Broad Beach for $14,500 a month in 2014. The property previously had been on the market for $5.5 million; after Jenner moved out it ultimately sold for $5.7 million, hardly a significant premium.
Another celebrity tenant risk: overexposure. A star who displays a rented pad frequently to a large social media following quickly can erode the prestige and exclusivity of a luxury home — a phenomenon Mintz has seen with increasing frequency. "I have clients tour a listing, and they'll say, 'I already saw this house on Instagram,' " she says. "If you have too much exposure, the house loses its quality."
This story first appeared in the July 15 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.
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