If the retired life doesn’t suit Bill Gross, the Bond King could well find another calling: Orange County luxury home broker.
When it comes to what’s important in a real estate deal running in the eight-figures, Gross has a simple mantra that wouldn’t sound out of place at any of the area’s top brokerages: “Location, location, location—with great views,” he told the Business Journal last week.
The co-founder of PIMCO—No. 29 on this week’s list of Orange County’s wealthiest residents—knows his stuff, having spent close to $200 million over the years on an assortment of well-known waterfront and cliffside properties in Laguna Beach and Newport Beach.
Deals have included a bayfront double lot on Harbor Island, the exclusive gated community home to Don Bren, George Argyros, Ron Simon and others. The double lot was purchased in 2009 for $23 million, with a single house which was torn down; the undeveloped lots were subsequently resold.
Compass agent Kathryn White represented Bill and Sue Gross both on the purchase and the sale of the double lot.
Other properties of Bill, including multiple oceanfront estates in the Laguna Beach private beach community of Irvine Cove, were handed over to his ex-wife Sue (No. 19 on this week’s list) as part of their 2017 divorce. White represented Bill and Sue in the purchase of two of those oceanfront estates.
His last two big acquisitions have arguably been his splashiest: in 2018 he paid a reported $35.8 million for an Irvine Cove oceanfront property, and a few months later spent another $32 million for an estate about a mile away, the famed “Rockledge by the Sea” property just off Coast Highway.
Of the last buy, its location was almost a deal-breaker, before a change of heart took place.
Initially, “Bill wanted a place closer to the golf course,” Amy Schwartz, Gross’ life partner, said in an interview last year.
Gross ultimately bought the home as a surprise for Schwartz.
The longer drive to the golf course hasn’t hurt the couple’s game. In January, Schwartz won the American Express Pro Am golf tournament, in the Overall Net category. The La Quinta tournament was previously called the Bob Hope Classic.
Quality First
For members of this week’s OC’s Wealthiest list, homebuying is a business into itself. More than $300 million has been spent on properties in the area over the past three or so years by those on the list, according to reports and broker data. Tens of millions more has gone into renovating some of those properties.
Not all take Gross’ approach to investing strategy: other luxury homebuyers in OC look to three things when it comes to buying a home, top brokers say: quality, location and privacy.
For the most part, it’s in that order.
“Location used to be the number one thing buyers looked to when buying a home. Now, they are much more demanding about the house,” top local broker Rob Giem of Compass noted.
Giem, known as a top agent for the wealthiest businesspeople buying in Orange County, was the listing agent of Rockledge by the Sea when Bill purchased it in 2018. He also recently represented an undisclosed buyer for two Irvine Cove properties both owned by Sue Gross, and listed by fellow Compass agent White. He said that most of these high-end buyers aren’t looking for a project, and will pay a premium for homes that are ready for move-in rather than going the custom rebuild route.
“Many of these shoppers looking for homes above $10 million do not live here full time, and therefore do not want a project,” said Giem. Instead, they “want something that is easier to own, less time consuming and that has value.”
In a word: new.
Oftentimes, they’d rather choose an “A” house in a “C” location than the other way around, he added.
There’s nothing overly complicated or new by way of design demands for these buyers—the simplistic trend that emerged in the past decade still holds true.
“It’s not specific to any one kind of architecture, but typically buyers are looking for open, light designs. Contemporary architecture has never been more in demand.”
As for amenities, it ranges from the predictable—swimming pools—to the more specific—a catering kitchen near said swimming pool.
Out-of-Towners
The COVID-19 pandemic has prompted a doubling down on the turnkey trend, with shoppers from neighboring metropolitan areas looking to Orange County as a safer bet.
“There’s a huge demand from buyers to move into a house now, and get out of cities like Los Angeles,” said Steve High of Villa Real Estate.
High was recently involved in one such deal, when he repped the listing for 2054 E. Oceanfront on the Balboa Peninsula.
The home sold for $10.3 million at the end of June to a pair of out-of-state buyers, which property records indicate are Sharon and Bob Miller, former chief executive and chairman emeritus of Albertsons Cos.
“The buyers wanted the home by the Fourth of July, and they came in and closed the deal in a week and bought every stick of furniture in the place.”
Spyro Kemble of Surterre Properties represented the buyers.
“I have never seen so many people using second homes as they are right now,” High said.
This week’s edition of the OC’s Wealthiest list includes six members who have notable, and pricey, second or vacation homes in the area.
Limited Supply
Finding new, turnkey luxury homes in Orange County remains a challenge.
When 2019 sales volume dipped below 2018 levels, many brokers and market watchers pointed to an economic slowdown as the reason.
Giem said this was instead due to a diminishing pool of new homes in Orange County, limiting options for buyers and making them more reluctant to buy a home, or pay top dollar for it.
“The market didn’t slow, it’s just that in 2018, 90% of the homes that sold over $10 million were less than five years old. In 2019, the majority of homes for sale over $10 million were older than five years,” Giem said.
“It’s going to be increasingly challenging in coming years for buyers to find the type of product they want.”
Neighborhoods closer to the water are uncoincidentally seeing a boost in new construction, as builders look to refresh the older stock of homes and return buyer interest.
Any new homes on the water sell quickly, and at a premium, like that of 1813 E. Bay Ave., a 14,000-square-foot bayfront home that wrapped a rebuild in 2018 and traded for $35 million, the third priciest deal last year.
Coldwell Banker’s Tim Smith handled that listing.
It was bought by Jared Smith, president of Utah-based cloud computing firm Qualtrics; he ranks No. 30 on the Wealthiest list (see page 26).
The priciest home to trade last year was perched high above the waterfront in Crystal Cove.
The home at 28 Midsummer spans nearly 19,000 square feet on a double lot in the high-end neighborhood, and was built in 2016, just three years prior to the recent sale.
It traded for $38 million, and was bought by industrial developer Carl Panattoni, whose namesake firm is based in Irvine.
2020 record
The largest luxe sale so far this year set a new record for the county: a $50 million deal for Dean Koontz’s Newport Coast compound in an off-market transaction that closed in June.
Stearns Lending LLC founder Glenn Stearns is the buyer of the Newport Coast estate. Stearns now runs Kind Lending, a new mortgage company in Santa Ana’s Hutton Centre.
The Newport Coast home he bought from Koontz, on 2.5 acres, runs about 30,000 square feet, according to news reports.
Koontz now lives in Irvine’s Shady Canyon, home to many of the county’s wealthiest residents, including Alteryx’s Dean Stoecker, No. 23 on the list.
High and Evan Corkett of Villa represented Koontz in the sale, while Rex McKown and Marcy Weinstein of Compass represented the buyer.
The deal bests the previous record for an OC home sale, set in 2016 when the landmark Twin Points property in Laguna Beach was bought by Patrick Soon-Shiong for $45 million. The owner of the L.A. Times, who made his fortune in the drug-development industry, ranks No. 2 on the list.
Giem handled both sides of that deal, as well as others in Laguna Beach that Soon-Shiong has bought.
