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Thirty-two stories above West Hollywood, California, there is a big, empty space. A sweeping, 7,000-square-foot penthouse in the storied, iconic Sierra Towers that has been stripped down to the bare concrete bones. Listed at $58 million, with sweeping 360-degree terrace views of Los Angeles, the fact that it is empty apparently makes it more valuable.
The new strategy, which is becoming increasingly popular in luxury real estate markets like New York and Los Angeles, is called "white-boxing." Strip out all the finishings, all the amenities, even the highest of the high-end kitchens and baths, and then you can charge more for the space.
"A lot of times people will buy something, totally done, beautiful and they'll still rip everything out and start over, so this trend is more, buy it, do whatever you want to do and you don't have to pay to rip out someone else's design," said Jade Mills, with Coldwell Banker of Beverly Hills. "This is much more valuable than buying something and having to rip everything out."
Not only does it save the buyer time and money, but Mills says it actually makes buyers feel better about the tear out, which they all know is not exactly environmentally sound. They may know they're wasting what was already there, but it's already been done, so they don't have to see that. It's tabula rasa real estate at its finest.
"White-boxing is really just having a blank canvas. So you can walk in, you just see the walls, you see the interior space, but you can do whatever you want to that space" said Mills.
It can make an older property seem new. And regardless of how iconic the building – Sierra Towers has had residents from Cher to Elton John — high-end buyers want to put their own stamp on whatever they buy.
"There is no appetite for 'off-the-rack' with this demographic; it's all about uber-customization," added Josh Greer of Hilton & Hyland, who just began marketing the full-floor penthouse with Mills. "As recently as a few years ago, it would be relatively rare for a seller to go to market with unfinished luxury space, but now there's increasing recognition that 'designer-ready' is exceedingly more attractive than 'move-in ready' to the ultra-wealthy."
And more attractive to the architects and designers who will be working on the projects.
"For us to take a white box and design like this, it's much easier because you get to bring the client here and really breathe the space," said Los Angeles architect Gavin Brodin. "A property is definitely more valuable stripped out."
Brodin said it is also easier to create computer-generated images, virtual renderings of potential designs, when the space is empty. He came up with some potential designs for the Sierra penthouse, so the seller can offer buyers ideas — something to look at beyond the view. He says no matter how high-end the home, most clients will rip out everything inside.
"That happens to us on nine out of 10 projects," Brodin said.
Because when you're paying $58 million or more for your new home, it's not perfect until it's personal.
Jason Grace is AZ Social Realty's content editor. Email him your real estate news ideas at email@example.com.
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