This 258-acre Los Angeles property just had a $71.5 million price cut

If you’ve ever lamented your property losing value, wait till you hear about the sprawling multimillion-dollar Los Angeles estate that’s been reduced by a staggering $71.5 million.

Senderos Canyon is situated in the heart of the ultra prestigious suburb of Bel Air, and boasts 258 acres (over 100 hectares) of undeveloped land equalling roughly 6 per cent of the entire suburb. It was originally put to market in 2013 at the brain-melting price of $179 million.

After three years, the anonymous owner delisted the property. This week, the estate was put back on the market at the slightly more palatable price of $107.5 million. That’s a 40 per cent price reduction.

So why the decrease in price? Agent Scott Tamkin, of Compass, said in an interview with Bloomberg that one of the reasons was changes in the way properties in the area were marketed.

He said when it was originally listed, agents were deliberately setting prices too high but shifts in the market meant that strategy no longer worked.

The other reason comes down to zoning. The property itself is made up of three separate sections, and none of the three are assessed. That is to say, they don’t have access to power, water, sewerage, or infrastructure.

Therefore, whoever ends up purchasing the lot will have to go through the onerous and expensive process of getting permission to install all those things.

“To be totally frank, the calculation for prices for raw land like this is like throwing a dart at a board,” Tamkin said to Bloomberg. “There’s really nowhere definitely that says: ‘This is what the value is.’ It’s not like selling a home, where there’s an exact comp.”

So the question becomes this: is the rigmarole worth it? What does this property provide to offset the high price and potential for having to deal with the frustrations of bureaucracy?

Well, for a start, the lack of any development on the land makes for tremendous opportunity. Given it borders the exclusive Mulholland Drive, and is smack-bang in the centre of an area predominantly occupied by celebrities and the mega-wealthy, the potential for development is varied and substantial.

The listing website proposes three possible directions the property could go in. Two of the three land parcels are zoned equine-ready for horses, so the first suggestion is a combination championship golf course, country club, and equestrian centre.

Another concept is the combination of an exclusive wellness retreat and private equestrian centre. The final proposal is a wine-producing family compound.

If none of those playgrounds for the fabulously wealthy take, there is also the potential for housing development. Up to 80 homes could be built on the land, according to the property’s agents.

Regardless of the vision, the estate is clearly being marketed to the ambitious, with the listing claiming it offers “a singular opportunity to shape the legacy of Bel Air’s story”.