$29M? Can We Talk?

By Dave Fratello | June 23rd, 2015

1000 The Strand Manhattan Beach CAIt takes a rare combination of factors to see a dated property lot sale in Manhattan Beach come up asking $29 million.

That combination of factors is at play now, however, at 1000 The Strand, home to a one-and-a-half-sized Strand lot (nearly 5000 sqft. of dirt).

Among the factors:

  • Low inventory.
  • Even more limited Strand inventory.
  • Ceiling-busting recent sales.
  • Demographic trends bringing vast amounts of funny new money into town.
  • A certain je ne sais quoi or "x-factor" in the market that has people – including longtime pros – more and more often throwing up their hands as if to say, "heaven only knows what this is really worth."

Here at MBC, we've stopped publishing our series of "shocker" posts because new closed-sale prices have so consistently surprised and amazed everyone for 2-3 years now, to call anything "shocking" anymore might sound naive.

In this environment, anything seems possible. Put a number on it, and see who comes.

516 The Strand Manhattan Beach CAThe list price of $28.900M for this pier-adjacent, ocean-view Strand lot follows on the heels of recent lot sales on The Strand that certainly did amaze and impress:

104 The Strand listed in early 2014 at $8.000M, a number that was then blown away by almost 20% with a bidding war and closed sale at $9.500M (Feb. 2014);

516 The Strand took that cue and listed for $10.000M in Aug. 2014, only to see that number blown away by 35% with a closed sale at $13.500M (Nov. 2014);

1700 The Strand sold off-market somewhere in between those two (July 2014) for the forehead-slapping price of $16.000M.

Each of those was just a boring, teeny 3330 sqft. Strand lot, whereas 1000 The Strand is 4979 sqft., a full 150% of the size of those. 

We put those figures into our slide rule here at MBC HQ and got the following "suggested" prices for 1000 The Strand:

$14.250M based on 104 The Strand

$20.250M based on 516 The Strand (the biggest open-market sale)

$24.000M based on 1700 The Strand (the biggest surprise and off-market sale)

Make of that whatever you will.

The robots over at Zillow haven't been able to figure out 1000 The Strand.

They're thinking $9.3M for this one, lower than every Strand lot sale for 2 years. (See the "Zestimate" here.)

Looks like Zillow will blow this one pretty badly, but remember, they get 1 out of 3 almost right. (See our post about Zillow's performance in MB, "Wrapping Up Our Zillow Test.")

The argument for a gigantic, stratospheric, moonshot-crazy number for 1000 The Strand is, essentially, scarcity.

There's just one lot exactly like it.

There are very, very few that are anything like it.

There's only one on the market.

Simple. And yet, scarcity will only take you so far.

We're looking back to a time (2011-12) when a super-scarce, impossible-to-replicate opportunity was presented to the world: 2016 The Strand and 2020 The Strand were offered together.

Imagine: A double-lot on The Strand with a corner, close enough to downtown to be in the mix, far enough away to suffer negligible impact in terms of crowds and parking issues.

Asking price: $30M. And there was the proviso that one "will only be sold to a buyer subject to the express condition[] of that said buyer also purchasing simultaneously" the other.

That's not what happened, though. The double lot didn't sell as such. They did split it.

One went for $9.450M (2020 The Strand, Jan. 2013) and one went for $8.400M (2016 The Strand, Jan. 2013).

That was a total of about 60% of the original asking price for the two together.

The opportunity at 1000 The Strand is different, as is the market.

$29M is obviously impossible (right?), but something big will happen.

Will the final sale provide a hint that things are calming, or just encourage the next big reach?

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614 The Strand Manhattan Beach CAUPDATE: Just after this post went live, a new Strand listing emerged: 614 The Strand is a smallish, somewhat updated duplex asking $18.275M.

On a pure land-value basis, that's $4.775M over the recent land sale at 516 The Strand

They're also asking somewhat more than the spectacular new-construction home at 104 The Strand, now at (only) $17.990M.

You know how sometimes we end a post with a question?

Do you think we already have a sense of the answer?

Did you expect an answer to come so soon?

Please see our blog disclaimer.

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