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Senderos Canyon Auction

     Los Angeles voters recently passed Measure ULA which calls for a 4% tax on the transfer of properties in the City of Los Angeles valued between $5 million and $10 million, while those valued at $10 million or above will pay a 5.5% tax rate on sales, starting April 1, 2023. The question is how will the new tax affect high-end real estate transactions and prices.

     Measure ULA may have been a factor in the $55 million sale of Mark Wahlberg's mansion and the $52 million sale of Villa Firenze. It would not be surprising if there are other high-end sales completed in LA prior to the ULA effective date, and then we might expect a slowdown in sales given that sellers will get hit by the extra tax starting in April. It also appears to be a factor in the pending property auction that has been the subject of several press articles (links below). Senderos Canyon is a 263 acre property representing a hard to believe 6% of Bel Air California. Sendero is Spanish for walking trail, or path. It has been on the market for years, most recently for $60 million, down from $125 million in 2013. It is now up for auction with a minimum bid of $39 million. Bidding opened January 24 and scheduled to end on March 15 with the seller likely hoping to close before ULA becomes effective on April 1, 2023.

     There is a chance Senderos Canyon will not sell given they have a $39 million minimum, it will take a lot of time and money to develop the property, interest rates have risen sharply, and now we have a banking crisis that could be affecting some potential buyers. Yet many of the comps below imply a higher valuation. After last year's auction of The One (which sold for $141 million net of fees) many were surprised when Richard Saghian (Owner of Fashion Nova) announced he was the winning bidder, and there is of course a good chance the next buyer of Senderos Canyon will be a surprise. Councilwoman Katy Yaroslavsky has proposed the City of Los Angeles should buy Senderos Canyon. For fun, below I've listed some some potential buyers of Senderos Canyon. Each is a long shot, but I would not be surprised if one of these were involved.

Links and Refences

Potential Buyers?

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