Town And Gown, Malibu And Pepperdine

Wall Street Journal, The New HOTTER Malibu:

Decades after Larry Ellison started buying up Malibu real estate, a new group of billionaires is sending prices in the famed beach city higher. Not everyone is happy about it. ...

Malibu, a beach city about 30 miles from downtown Los Angeles, has changed drastically over the last few decades, morphing from a largely undeveloped surf mecca into a pricey playground for celebrities and the uber-wealthy. The change—spurred in part by investment from tech titan Larry Ellison—has sent Malibu real-estate values skyward.

Malibu home prices have climbed even higher since the Covid-19 pandemic. As it became clear that the crisis would continue for some time, some of the country’s wealthiest people fled to Malibu, lured by its uncrowded beaches, sunny weather and relaxed, surftown vibe. They vied to purchase the most sought-after beachfront and blufftop properties, picking over the already small number of available homes for sale. Much like other high-end markets across the country with limited inventory, the Malibu market “took off like a rocket ship” .... And despite mounting evidence that wealthy buyers are starting to pull back from luxury markets across the county, activity in Malibu shows little sign of letting up.

Malibu residents say they are accustomed to celebrities and billionaires moving in from out of town, but even they are shocked by the city’s newest round of big-ticket home sales. The Bohemian character that lured wealthy buyers to Malibu in the first place, some locals said, is on the verge of being irrevocably lost. ...

Overall, the number of Malibu home sales of $5 million and up swelled to 81 last year, up from 39 in 2019, according to appraisal firm Miller Samuel. In the first quarter, the median price for a single-family home shot to $6.99 million, compared with $4.25 million during the same period of 2021. ...

For many wealthy buyers, the allure of Malibu is its relaxed atmosphere, which allows them to disappear from public view. “When these people come here, they are different,” Mr. Stern said. “People who you normally see on TV all dressed up, here they don’t shave or comb their hair.”

Another reason for Malibu’s popularity among the uber-wealthy is that its beaches are significantly less crowded than those in Santa Monica or Venice Beach, and lack souvenir stands, beach vendors and amusements.

And then there’s Larry Ellison, the co-founder of tech giant Oracle. Mr. Ellison became synonymous with Malibu starting in the early 2000s, when he started buying up numerous homes in the beach city. He now owns around 10 homes on Carbon Beach, and locals say they occasionally spot Mr. Ellison around town or on his yacht docked off Paradise Cove.

But Mr. Ellison didn’t stop at buying homes. He also has ownership stakes in multiple buildings and commercial ventures that helped convert Malibu from a rustic and rundown surf city into an upscale destination, according to his real-estate agent, Kurt Rappaport of Westside Estate Agency. Mr. Ellison turned the PierView Restaurant and Cantina, a casual local eatery popular with students from nearby Pepperdine University, into a high-end Asian restaurant before turning it over to the private club Soho House. Another casual restaurant, known as the Windsail, was transformed into a Nobu restaurant, attracting celebrities such as the Kardashians and Justin Bieber. The Casa Malibu Inn, a low-key 1950s hotel, became the Japanese-inspired Nobu Ryokan Hotel, where rates start at a minimum of $2,000 a night. ...

The few Malibu homes on the market have eyebrow-raising price tags. In May, self-storage billionaire Tammy Hughes Gustavson listed her late father’s Paradise Cove home for $127.5 million. Former Disney chief executive Michael Eisner is asking $225 million for his Malibu compound on roughly 5 acres near Broad Beach. If the property fetches its asking price, it will set a record for California, according to Mr. Rappaport, the listing agent, who said there has been significant interest in the property. ...

While many Malibu residents are pleased that their home values have grown, others lament the loss of the old Malibu.