Mansion Global

Mauricio Umansky Can’t Believe Los Angeles Home Prices Either

The Agency founder sees more room for growth, but thinks developers may need to change their pricing models

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Composite: Rodrigo Vaz / Getty Images; The Agency
Composite: Rodrigo Vaz / Getty Images; The Agency

As founder and CEO of Los Angeles-based brokerage The Agency, Mauricio Umansky handles some of the most eye-popping sales in Beverly Hills, Bel Air and beyond (including the Playboy Mansion in 2016 and the Carolwood Estate, former home of Walt Disney, in 2014).

Since launching the company with co-founders in 2011, Mr. Umansky’s firm has grown to more than 180 active agents with offices across the Los Angeles area; in San Francisco; Palm Springs, California; and Arizona. Outside the U.S., The Agency has offices in Turks and Caicos and in Mexico in Los Cabos and Punta de Mita.

And in 2012, they launched The Agency Development Group, which handles sales, marketing and management for some major real estate projects, such as The Ritz-Carlton Residences and One&Only Resorts.

To date, the company has closed more than $9 billion in real estate transactions.

Mr. Umansky also often appears on "The Real Housewives of Beverly Hills" with his wife, Kyle Richards.

We caught up with him to talk about the ultra-hot Los Angeles luxury market, his dream home (spoiler alert: he’s moving into it) and more.

Mansion Global:Describe your dream property.

Mauricio Umansky: Two-and-a-half acres of flat land, with views of nature, beautiful landscaping, and close to an urban location, like Los Angeles. Ideally, probably 10,000-12,000 square feet of interior space, and a traditional or Colonial-style exterior with Old World charm, like a Paul Williams house built in the early 1900s.

The interior would be modern, fresh, with high ceilings, and an amazing gym and spa. There would be great indoor, outdoor flow for entertaining.

I would also have my own closet and bathroom because my wife occupies all of it now.

It would also have a great bar/lounge, maybe Art Deco-style. I’d want an office and an area where the kids could play, gather and have their own space.

More:New York Interior Designer on Why a Luxury Home Must Anticipate the Owner’s Needs

MG: Do you have a real estate property that got away?

MU: There’s been a lot of properties that have gotten away from me from an investment standpoint, but usually that was because of a lack of money to buy everything. When we were going through a recession, prices were low, and now you see what’s happened with prices in the L.A. area, and I wish I could have been more aggressive.

A lot of properties, even for personal use, fall through because when I write an offer, because I am who I am, the seller will either raise the price, or decide not to sell. My offer validates the value of their home. Sometimes I’m in a difficult position.

MG: What does luxury mean to you?

MU: It means different things in different areas. There can be luxury product at many different price points― from $2 million to $50 million. But there’s always a certain level of quality in terms of materials, a certain level of lifestyle. It also has to do with the services, like concierge, gyms, or the amenities a house has.

Luxury is more of a lifestyle than anything.

More:Take Your Time When Searching for Real Estate, Says Time Equities Chief

MG: What area do you think is the next hub for luxury properties?

MU: It feels like the entire globe is looking at Los Angeles―whether New Yorkers or Midwesterners from Chicago, or Canadians, or buyers from China or Hong Kong. Right now it’s the trendiest city for luxury properties.

I see potential in areas like Calabasas, Encino and Studio City, where there are opportunities to find luxury properties, and the next wave of luxury properties―from $8 million to $16 million.

Bel Air and Holmby Hills are becoming unattainable even for people with money.

MG: What’s the biggest surprise in the luxury real estate market now?

MU: How high the prices are getting. Developers are making the mistake of thinking of a home’s value as price per square foot. Value is driven by a lot of factors―size of land, views, lifestyle. A lot of amateur developers are just building as big as they can, and they can’t sell the properties.

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MG: Where are the best luxury homes in the world and why?

MU: In the south of France, places like Cap Ferret, near the Hotel Du Cap, and in Cap d'Antibes, you see some of the most expensive sales in the world. It’s about the land, ocean, and an old-world charm and panache.

Also, Los Angeles is a leader in architecture right now...some of the new stuff being built is spectacular.

MG: Favorite part of your home?

MU: I’m in the middle of buying a new home, but my favorite part of my current home is definitely my pub. It’s like an old- world British club.I claim to have the best tequila and best scotch in the city. That’s where everyone hangs out. Once you’re in there, and listening to music, it’s hard to send people home.

In my new home, it’s the grounds. But honestly, I’m lucky enough to be buying pretty much my dream home.

More:For the Obamas’ Former White House Designer, Bigger Isn’t Always Better

MG: What best describes the theme to your home and why?

MU: It’s best described as a traditional family home. There’s great energy. It’s a little bit eclectic in terms of style, but mostly it’s conducive to having a close family.

MG: What’s the most valuable amenity to have in a home right now?

MU: For me, the gym, the yoga area, and the pool. Everything that brings health into the home. In my new home, we have all that, plus a complete organic garden.

But the most simple amenities people are willing to overlook are closets. Developers are not building them large enough. If someone’s buying a $40 million, $50 million or $60 million homes, they probably have a pretty extensive collection, and they need to put it somewhere.

The auto gallery has become a must-have, and if you don’t have a theater, you didn’t even build a house.

We’re also seeing more hammam-style spas, and people converting gyms more into a wellness center.

People like an entertainment area, too, almost like their own nightclub. Sometimes it’s a sports lounge. It’s about bringing the party to your house instead of going to search for it.

More:Spain’s Market is Surprisingly Hot, Says Brokerage Co-Founder

MG: What’s your best piece of real estate advice?

MU: Two pieces of real estate advice: One is for agents: They really need to be able to have no fear, No. 1. And No.  2, to give true and accurate advice. Don’t be a people pleaser. There are too many mistakes made with overpricing, and the person who ends up getting hurt is the seller. Overpricing a home can cost them millions of dollars, but often the agent is scared of telling the seller the truth.

For developers, my advice is don’t over-leverage yourself. If you’re new to the game, make sure you’re getting good advice from those who’ve done it before.

MG: What’s going on in the news that will have the biggest impact on the luxury real estate market?

MU: Uncertainty with our government. There’s a tremendous amount of uncertainty about where the economy is going. We’re almost at the end of the year and haven’t seen tax cuts or a lot of the things that have been talked about.

MG: What is the best area now for investing in luxury properties?

MU: There are a lot of great areas to invest― I’ve made some investments myself in Punta de Mita, Mexico, and they’re getting new developments with the One and Only.

Bel Air and Holmby Hills are super hot. If you can find the right buy, there are still great opportunities there.

In New York, it’s been a little soft for a while. There may even be opportunities, and some value, there.

And we’re seeing some great new developments around the country that are seeing great appreciation―resorts and second-home types. Airbnb and high-end rentals allow an owner to have positive revenue on those homes.

More:Click to Read More Luxury Real Estate Professionals Share Their Insights

MG: If you had a choice of living in a new development or a prime resale property, which would you choose and why?

MU: Can I own two houses? Right now, it would be to have a resale for a main home, but I have multiple vacation homes in new developments.

MG: What area currently has the best resale value?

MU: We’re seeing Holmby Hills and Bel Air reaching incredible heights. We recently saw two homes that sold for $100 million and two that sold for close to that.

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