Beverly Hills: Swanky Housing in Denial?

April 10, 2008 — -- Beverly Hills. "That's where I want to be," goes Weezer's pop classic.

All around the city, ultraluxury condo complexes are sprouting up in an outward show of confidence from investors who have seemingly ignored forecasts that the high-end property market will slow to a crawl.

Opinions on whether their confidence is built on foundations of stone or sand depends on which expert, developer or Realtor is doing the talking.

"The talk is of a United States on sale, but the truth is that it remains the best place to invest money longer term," Los Angeles Economic Development Corp. chief economist Jack Keyser said. "On the west side, there have been year-over-year increases in median property values -- nobody is creating land in this area of Los Angeles."

In fact, you'll now pay 12 times more for the same-size house in Beverly Hills than you would in Arlington, Texas, according to the Coldwell Banker Home Price Comparison Index.

An asking price of $3,000 per square foot perhaps seems incredible for a condo but not for those familiar with the so-called "Golden Triangle." Residents are walking distance from Rodeo Drive, the Los Angeles Country Club and the Beverly Hilton hotel.

The Montage development is one of four ultraluxury condo blocks currently under construction within this small area, an area where Gucci handbags are accessorized with Chihuahuas. The $200 million building will have full concierge services, delivered groceries, catered meals and an on-site hotel, should one's guests prove too demanding, according to the developers. Corner condos will run beyond $8 million.

"Prices like these don't scare people in Manhattan or Beverly Hills," said Sotheby's real estate agent Jeff Hobgood. "People demand quality and have the ability to pay for it."

Just down the road, the CPC group headed by Brits Nick and Christian Candy spent $500 million on a site the previous owner had purchased for $33.5 million just three years earlier. Their idea: build 252 condos and run away with a billion and change.

The brothers have a reputation that says it will work; a CPC development in London's Hyde Park is selling for an astronomical $11,000 per square foot.