One Saudi bought a $27 million estate by helicopter without walking inside, while the Peninsula hotel offers Muslim prayer rugs; those are just two examples of how the super-rich Saudis and Chinese are changing the culture and consumer habits of the Golden Triangle, with 63 percent of spending now coming from international travelers
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“I’ll take that one,” said a Saudi Arabian royal, pointing down from a helicopter while with his realtor on an aerial tour over Beverly Hills’ tony Trousdale Estates. He was picking out a massive 11,000-square-foot estate (complete with pool, picturesque views and two acres of property) — before stepping one foot inside the off-market listing, which was then home to Mary Hart and Burt Sugarman. Instead, according to property records, he paid north of $27 million from the sky to get the couple, who had lived there 25 years, to move out in three weeks so he and his family could celebrate Ramadan in their new digs (once owned by Elizabeth Taylor), says a source close to the owners.
Across town, a woman mulled over a coveted Celine trapeze bag that had just been placed on a Barneys shelf. “You’d better make up your mind fast,” a clerk warned. “If you don’t, within 15 minutes 15 Chinese ladies will snap up all 15 of these bags” at $2,500 a pop.
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So why them? And why now? It’s a complex answer that includes robust native economies (China’s is the world’s fastest-growing according to a 2014 estimate by the International Monetary Fund); the lure of Los Angeles weather; an increase of direct flight options; inexpensive real estate in the area compared to international destinations like New York, London and Paris; and local universities that are drawing foreign offspring. Insiders also point to relaxed visa restrictions that have allowed travelers easier access.
If you’ve spent any longer than a New York minute in Beverly Hills lately then you’ve seen the stacked tour buses carrying dozens of Chinese visitors to and from hotels or family enclaves in the San Gabriel Valley, or pre- and post-Ramadan visitors from Saudi Arabia during the summer months on sidewalks or inside any number of luxury hotels. Now that the city has opened its doors, stores and vacant mansions to MMTs, one thing is clear: The Beverly Hills economy is changing.
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The Agency’s Paul Lester offers startling statistics: Of the buying market for properties from $5 million to $50 million, the active Asian and Saudi Arabian component comprises 15 percent of closed deals, a rise from about 5 percent a year ago. Lester adds that, according to his company’s research, foreign sales are up overall by 30 percent. “A lot of foreign investors are using these homes as a holding place for money. It’s their bank,” says Lester, noting that many buyers never move in or only use the homes a few weeks a year. “The thought is that the U.S. is a safe place to put money and engage in monetary transactions.” Realtors say the majority — if not all — of these types of deals are cash transactions, because of the extreme wealth of buyers and the difficulty foreigners have in obtaining loans from local lending institutions.
Madison Hildebrand of the Malibu office of Partners Trust Brokerage says the largest sale of his career came courtesy of a Saudi buyer who snapped up a Beverly Hills estate for $20 million. “Most often, they are looking for a compound where they can maintain their culture by having their family live in the ancillary houses on the property so that everyone can have enough space,” he says, adding that they even use their own butlers.
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Julie Wagner, CEO at Beverly Hills Conference and Visitors Bureau, says the city is experiencing a complete reversal from 2007, with 63 percent of spending in Beverly Hills now coming from international travelers. “In the last few years there has been such a growth in Chinese visitors that the stores take yuan for pay and most have Mandarin-speaking employees,” says Wagner. (Saks also has Cantonese.) Adds Tom Voltin, president of Saks Fifth Avenue Beverly Hills: “In our business, China and the Middle East is a bigger slice of the pie. We extend hours for Saudi Arabian customers to pray and there are areas in the store to accommodate that, too.” Saks’ Voltin says a Saudi princess arrived one night at 7:30 p.m. (closing is at 8) and the store stayed open until 10 for her. This happens on average once or twice a week, he adds.
Full article: The New Beverly Hills: Riyadh Overruns Rodeo Drive (The Hollywood Reporter)
Global Geopolitics 