The priciest home on Malibu's famed Billionaire's Beach has found a bona fide billionaire buyer.
In what will be the most expensive home sale ever for Los Angeles County, hotelier Peter Morton has an agreement in place to sell his oceanfront property in Malibu's Carbon Beach, better known as Billionaire's Beach, to natural gas billionaire Michael S. Smith and his wife, Iris Smith, for $110 million.
It's an astronomical sale even in the world of luxury real estate. The previous county record was $100 million, which was hit twice in 2016: for the sale of the Playboy Mansion in Holmby Hills, and for a mega-mansion built on speculation in the same neighborhood.
The Malibu sale, expected to close Tuesday, is the latest huge deal for the exclusive beachfront city, where two $85-million sales have closed in the last year and a half.
Long a local getaway for Hollywood's elite and, more recently, a favorite haven and investment area for tech entrepreneurs, Malibu continues to open pocket books. If only there were more of it to go around.
"There are never going to be that many giant sales [in Malibu], because there are only so many homes that have a lot of beachfront and multiple parcels," said Jack Pritchett, co-founder of Malibu-based brokerage Pritchett-Rapf Realtors. "We can say $110 million is a joke, but you can't find multiple-lot properties like Morton's."
Squeezed between two homes owned by Oracle Corp. co-founder Larry Ellison, the half-acre property on Pacific Coast Highway comprises two parcels with two structures and more than 100 feet of beach frontage.
Morton, 70, acquired the two properties over the last three decades in separate transactions totaling $5.6 million, public records show, and commissioned architect Richard Meier to design the compound.
Wrapped in rich teak wood, the main house and guesthouse combine to offer seven bedrooms, nine bathrooms and about 8,000 square feet of living space. Shutters and windows throughout the contemporary homes are automated, and wrap-around balconies are centered toward the ocean.
A swimming pool and a courtyard garden filled with native beach landscaping make up the grounds. Wood-plank walkways connect the structures while leading to the shoreline.
Hilton & Hyland agent Brandon Williams, who teamed with his wife, Rayni, to sell Morton's home, said the Hard Rock Cafe co-founder had no intention of selling property when Williams first broached the topic two years ago.
Morton was hesitant at first, Williams said, but the real estate agent knew the hotelier was spending most of his time in the Hamptons in New York.
"I'd worked with Peter before. This was my eighth or ninth deal with him," Williams said. "He trusted me."
Williams asked for a number; Morton came back with $110 million.
What followed was a two-year courtship of the buyers that included multiple showings and saw them leasing the property for an extended period of time. Barry Peele of Sotheby's International Realty represented the Smiths in the sale.
Smith is the chairman and chief executive of Freeport LNG Development, a Texas energy company that offers vacuum-insulated gas transfer lines, regasification services and storage facilities for liquefied natural gas. He previously served as president of both the Colorado Oil & Gas Assn. and Basin Exploration Inc.
Williams confirmed that the $110-million price is for the home only; furniture and artwork, negotiated items often used as deal sweeteners in the high-end market, were not included in the sale.
What will be the next big domino to fall in L.A.'s red-hot luxury market? There are plenty of candidates.
Four L.A.-area homes are currently priced at $110 million or more, according to the Multiple Listing Service, not to mention a handful of large estates and spec-built mansions circulating as pocket listings from $100 million to $500 million.
Atop the MLS list is the onetime Holmby Hills home of Candy Spelling that currently lists for $200 million. Known simply as the Manor, the 56,600-square-foot palatial estate is the largest single-family home in Los Angeles County. It has spent more than 17 months on the market since its current owner, Petra Ecclestone, listed it.
And still up for grabs is Billionaire, the larger-than-life compound developed by handbag mogul Bruce Makowsky. The amenity-filled compound was reintroduced to the market last week at $188 million, a 25% reduction from its original price of $250 million.
For those holding out for a market correction, a warning: Don't expect to see one soon, if it all.
"I would have thought we'd have another recession two years ago," said Jeff Hyland, co-founder of Hilton & Hyland. "Even if things start slowing down in other parts of the country, like Manhattan, where you can build another high-rise, you're not going to see that in L.A. because there's no land left."
A limited supply of homes on the market has continued to drive up price appreciation throughout the Southland. In March, median home prices in Southern California climbed 8.4% from a year earlier, setting a new all-time high.
The same goes for the luxury market, particularly in leading sub-markets such as Malibu, where an eroding coastline has been a topic of conversation for years.
Sales activity indicates that while some long-term investors are bearish on the consequences of climate change, others have no issue with it, according to Paul Habibi, a professor of real estate at UCLA.
When Hyland shows homes in Malibu to clients, he does so with a caveat: The property may not be here for your grandchildren. But even with potential issues down the line, he says most people aren't dissuaded.
"They're looking to enjoy themselves now," Hyland said.
For the rich and famous looking to enjoy themselves, Carbon Beach has long been an appealing address.
Ellison is perhaps Billionaire Beach's most well-known resident; over the last two decades, he's purchased at least a dozen properties in the beachfront area.
Other notable homeowners include film studio head Jeffrey Katzenberg and billionaire Eli Broad. Former Dodgers owner Jamie McCourt bought her Carbon Beach home a decade ago from "Friends" actress Courteney Cox. Oscar-winner Leonardo DiCaprio sold his longtime home in the area two years ago.
5:55 p.m. This article was updated with additional details.