The top-ranked broker in TRD’s luxury residential ranking, Westside Estate Agency’s Rappaport talks about his expansion into commercial and why most agents are dinosaurs.
April 17, 2019
Kurt Rappaport is a co-founder and the CEO of Westside Estate Agency, a boutique residential real estate brokerage with offices in Beverly Hills, Malibu and Miami. He ranked as the No. 1 broker on The Real Deal’s top broker list for 2019, landing more than $513.4 million in deals in the past year. A true Angeleno, Rappaport grew up in Westside Los Angeles before attending the University of Southern California to pursue a degree in film. After coming to the conclusion that a talent agency’s mail room wasn’t in his career trajectory, Rappaport got his real estate license, opening the Westside Estate Agency with Stephen Shapiro in 1998. He’s currently listing NBCUniversal executive Ron Meyer’s home in Malibu for $125 million, the county’s eighth-priciest listing. But the star agent, who broke a record in Malibu when he sold his own home for $85 million, also has a double life as a developer. In addition to the seven commercial properties he’s renovating in Beverly Hills, Rappaport is in the midst of opening a private members club in West Hollywood. In this interview, which has been edited and condensed for clarity, TRD sits down with Rappaport to hear his thoughts on making 38 deals with software mogul Larry Ellison, getting home-flipping advice from his celebrity client Ellen DeGeneres and managing 110 agents.
What was your childhood like?
I grew up in two separate households. I lived with my mom until I was 12 and then my dad from the ages of 12 to 18. My dad was a lawyer, and my mom was a Christian jewelry designer.
How did you get into real estate?
Because I was at USC, I was able to get a good entertainment job and saw very quickly it wasn’t what I wanted to do. I didn’t think there was anything tangible. Everyone was producing something that didn’t exist. I also loved the art of the deal. Ruth Ryon wrote the “Hot Property” column at the time and she would always write about interesting people. I wanted to know who they were, what the properties were and how much they cost. So I decided to get a real estate license and not go into entertainment, which was kind of the natural thing to do when you’re a kid growing up on the Westside. I did my own thing and stuck to it.
What was your first job in the industry?
I started at the very bottom at Merrill Lynch Realty in Beverly Hills. I did the opposite of everything they taught me. From the get-go, they teach you the “ABCs” — Always Be Closing — and wherever you are, have a pen in your pocket. It’s probably the worst thing you can do and why almost all real estate agents have been taught to be pushy salespeople.
How did you and Stephen Shapiro start your own brokerage?
I worked for Shapiro at Stan Herman, Stephen Shapiro and Associates. I got to know him really well, and then we wound up becoming partners and starting our own company in 1998. We started with four people and grew to 110 agents.
How did you go about setting up your shop?
We don’t have many staff. We run an efficient ship. I have one assistant. There are agents that have teams and seven assistants, and one is more incompetent than the next. The tail doesn’t know where the head is and the head doesn’t know where the tail is, and I don’t think you need that. Or I didn’t need that.
You recently paid $40 million to acquire a commercial property on Canon Drive. What made you want to get into commercial real estate?
It’s always good to diversify and not just be stuck in one field. It’s very difficult to even acquire locations in Beverly Hills, and then if you can revitalize great buildings, create something special in an iconic location, it’s a great long-term asset to have.
What are your plans in commercial?
I have seven buildings on Canon, and they’re going to be completely revitalized. They’ll have retail, office and, one day, residential units above. I’m the next corner over from where Louis Vuitton Moët Hennessy just spent $440 million. It’s not a bad place to be. I’m also working on a private members club.
Tell me more about that club.
It’s so private we don’t even have a name for it yet. Me and a couple of partners have been building it for a couple of years. We bought the property already, a 10,000-square-foot, three-story building on the Sunset Strip. Think Soho House, but more exclusive.
Lots of private clubs seem to be opening up in L.A. Yeah, there are 20 successful members clubs in London. Jeff Klein just opened the San Vicente Bungalows. It’s a beautiful place, and he’s going to kill it. I think I’m the only real estate person that’s a member there. Most real estate people are a step below used car salesmen, even the successful ones. It’s a business of dinosaurs that hasn’t evolved.
What has been your best deal?
My best deal has been going on for the last 15 years, but it’s representing Larry Ellison on the most prolific buying spree in the history of residential real estate. I met him through David Geffen. It started with one house, when Malibu didn’t have anywhere great to stay or eat. We’ve now changed the entire complexion, 38 transactions later. My other best deal was selling my own house and setting a new record in the area. [Rappaport sold his Malibu home to billionaire Daryl Katz for $85 million last year. He declined to comment on specifics.]
In July, you bought one of your own listings (Frank Biondi Jr.’s house in Brentwood). Does that line ever get tricky?
The property had been on the market for a long time and hadn’t sold. Frank and I had a very trusting relationship — he was happy to sell it to me because he knew I would close the deal. A good deal is when both sides feel good.
How many investment deals have you made?
I’ve built, remodeled or owned about 20 houses. Ellen DeGeneres used to tell me that you can put one $70 scarf from Banana Republic and another scarf from Loro Piana that’s many times more expensive next to it, and they look the same to most people. But once you know the feel, stitching and how it falls around your neck, you can’t do the cheaper one. So for me, my philosophy is always to spend more because it’s worth more.