Real Estate Edge by Mike Michalski & Sachi FujitaHome
Mike Michalski & Sachi Fujita’s
A Real Estate Resource for the Beach Cities of Manhattan, Hermosa, Redondo and Beyond
Strand Lot Values Explode
The siren call of the ocean seems to have gripped local developers and owner-users looking to build right on the beach, causing prices for prime Strand properties in Manhattan and Hermosa to sky-rocket of late. Consider the following:
We wrote about this sale back in September in our post “$8.7 Million Teardown?.” This home, which was custom-built for the sellers in 2001, didn’t start out as a lot sale when it hit the market with a price tag of $11 million back in April, 2013. But when no buyers showed up and the price began to drop, it started to approach dirt value (lot size is 3503 sqft).
Once the list price hit $9.7 million, a deal was within reach. The final sale price? $8.7 million, which seemed like an enormous sum for a teardown at that time.
The sale closed in November. We understand the buyer is an owner-user who will be building a more practical custom home as his own personal residence.
This south end Strand lot hit the MLS at $8 million on January 2, no doubt picking up where 2316 The Strand left off although this is a slightly smaller lot at 3330 sqft.
Nonetheless, there was immediate interest from 5 all-cash buyers (3 of them builders) and the price, we hear (the property is currently in escrow), was pushed up to $9.5 million for the winning bidder.
We understand that bidder is Demetrius Doukoullos, the builder of the home – 2666 The Strand, Hermosa – that currently holds the record for highest-priced Strand sale at $14.8 million (we wrote about this sale in our blog post “Record Strand Price (And It’s Not In Manhattan Beach“). For that extra-large (4380 sqft) North Hermosa lot, Demetrius paid “only” $6 million back in 2011 (making the subsequent sale one of the biggest grand slam home runs in the development community) so one wonders what he has in store for 104 The Strand.
It’s interesting to recall that just a little over a year prior to 104 The Strand hitting the market, the neighbor, 108 The Strand, sold for $7,050,000 – and it took some 200 days and a $749,000 price reduction to get there. Same size lot with a 4,026 sqft home on it.
The times they are a-changin’.
This property consists of two attached townhomes, 1420 and 1422 The Strand, on a 4000 sqft corner lot. These two contemporary-style townhomes were originally constructed in 1994, with the front unit trading in 1997 for $1,250,000 and the back unit being picked up by the same owner in 2008 for $3.3 million.
Now the entire property has been sold for $12.6 million (down from the list price of $14.5 million), with the lucky seller due to pocket some $8 million in capital gains (less commissions and closing costs) once escrow closes.
Look for something special to grace this oversized, downtown-close location in the future.
2020 The Strand, Manhattan Beach
Lost in all this craziness was the sale of 2020 The Strand back at the beginning of last year. That 3224 sqft corner lot was originally one of a pair of lots (the other being 2016 The Strand) that were offered together as a package deal for $30 million back in 2011.
Alas, the market was not nearly as accommodating to high-priced dirt (or sand) back then so, after over a year on the market, the seller relented and agreed to offer the parcels separately. The more desirable corner lot got a list price of $11,249,500 and eventually sold in January, 2013, for $9,450,000.
As you can see from the photo, the 3224 sqft house that came with that prized parcel is no more.
Meanwhile, the adjacent duplex at 2016 The Strand also sold in January of last year for $8.4 million. That structure is still standing, at least for the moment.
1942 The Strand, Hermosa Beach
Not to be outdone, Hermosa has chipped in with its own high-priced Strand lots, in this case a double lot (two 30×80 parcels straddled by a single teardown)) at 1942 The Strand.
It’s rumored that the two lots together, which are currently in escrow after an off-market sale, will go out at over $14 million. There is currently an effort to re-sell or assign the interior lot for $6.5 million with the purchaser angling to retain the exterior lot which is adjacent to a 20′ wide restricted use area on the walkstreet.
So, evidently, high-priced Strand lots seem to be in vogue at present. As was aptly noted in “The Wolf of Wall Street”, “Supply and demand, bro.” (Applies to pens and Strand lots).