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This summer, Kurt Rappaport is renting out his oceanfront estate inMalibu, Calif., for a price he sees as a relative bargain: $750,000 amonth.

Mr. Rappaport, co-founder of Westside Estate Agency, a real-estatebrokerage, set his fee well under what it would cost to stay at the bestsuite at the Beverly Wilshire Four Seasons for a month or to charter ayacht.

“Presidential suites don’t have screening rooms, your own gym, or a168-foot-long pool. It’s kind of a no-brainer,” said Mr. Rappaport, whois 45 years old. The 22,000-square-foot home, completed in 2014, isalready booked for the summer, he said, declining to name thetenants.

Malibu, an upscale beach community with 21 miles of Pacificcoastline, was once primarily a favorite summerlong getaway forHollywood power brokers. In recent years, the community hasundergone a sea change, local homeowners and real-estate agents say.Monthly rents are soaring, with the biggest demand for summer beachhomes coming from the financial and tech industries, said Tony Mark,a broker associate at Sotheby’s International Realty in Malibu. Heestimates that about half of his clients come from Los Angeles, aquarter from the East Coast and another quarter from oversees.

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http://www.wsj.com/articles/malibus-summer-rental-market-booms-1458223281

REAL ESTATE HOMES

Malibu’s Summer Rental MarketBoomsLured by 21 miles of Pacific coastline, tech titans, overseas oligarchs and others are payingfrom $20,000 to $750,000 a month to rent summer homes in Malibu, Calif.

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March 17, 2016 10:01 a.m. ET

By KATY MCLAUGHLIN

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Five years ago, “the world’s wealthiest started paying attention,” saidBarry Kinyon, a broker associate at Sotheby’s International Realty inMalibu who has been offering summer rentals for 20 years. Last year,Mr. Kinyon had clients—“they were foreigners, oligarchs,” he said,declining to name them—who paid $33,000 a night for a Malibu beachcompound for about a month.

They chartered a helicopter to take their kids to Legoland and hiredtop chefs from Beverly Hills to put on dinner parties, Mr. Kinyon said.

“It’s a new market that’s emerging,” said Johnny Steindorff, a partnerat 4 Malibu Real Estate, citing Mr. Rappaport’s house and anotherestate listed for $350,000 a month.

More typical rental prices start around $20,000 a month in July orAugust for a two- to three-bedroom oceanfront condo and $35,000 amonth for a “nice luxurious beachfront house,” said Mr. Steindorff.

Houses with privacy hedges and fences, tennis courts and pools, whichare rare in Malibu, tick the price upward. Another selling point:proximity to Nobu Malibu, a famous sushi restaurant.

Among the most coveted amenities: private entry or “key access” tothe beach. These are beaches where the public cannot access theentryway because it is locked by a gate to which only residents havethe key. Santiago Arana, managing partner at the Agency, a LosAngeles brokerage, said a couple of years ago, renters paid $200,000 amonth for a client’s house with private beach access.

Jon Waterman has rented in Malibu for the past three summers,commuting from his home in L.A.’s Hollywood Hills neighborhood forlong weekends. While in the past he rented for a month or two, thisyear he is planning on staying the whole summer. His budget: $50,000

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to $60,000 a month. He’s looking for a two- to three-bedroom propertyon Carbon Beach with an “open floor plan, great deck space and plentyof great, sandy beach,” said Mr. Waterman, chief executive officer ofAd.net, an Internet advertising firm.

Since he has been renting, Mr. Waterman said he has noticed moreforeigners in the Malibu scene, and that prices have risen. “Malibu hasslowly become a little bit of the L.A. Hamptons,” said Mr. Waterman,who is 38 years old.

Alison Betts, an agent for Teles Properties, also noted the price creep.

“The same listing thatwould have rented for$65,000 a month at the lastpeak [around 2006] couldbe $100,000 today,” shesaid.

Renters can expect to paythe most in prime locationson Carbon Beach, MalibuRoad, the Malibu Colonyand Broad Beach. Thesehave the most cachetbecause they are “off thehighway, quieter, haveeasier parking, nice walkingstreets and are close to the

nicer commercial areas,” Mr. Mark said.

However, erosion has wiped away the sand on parts of Colony andBroad beaches, making some parts less desirable, Mr. Kinyon noted.

Carbon Beach “has its own allure,” said Mr. Mark. It boasts the easiestcommute to more central parts of Los Angeles, and is where DavidGeffen has an estate and Oracle founder Larry Ellison owns multipleproperties; it’s also the closest to Nobu.

Lela Becker has been renting on or near Carbon Beach for the past 10years, paying between $20,000 and $30,000 a month, she said. Herhusband, mother, sister and other relatives make up a core group ofeight who sleeps in the house, but daily gatherings of 15 to 25 familymembers and friends are common, she said.

There they spend time surfing, paddle boarding, building bonfires,barbecuing and “hanging on the beach,” said Ms. Becker, the 40-year-old co-founder of Mother, a company that makes high-end denimjeans.

Available in Malibu for PeakMonths

Three homes on the rental marketin the summer enclave

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PHOTO: SCOTT GAHRET$75,000 a month

Four bedrooms, five bathrooms

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The robust monthly market has encouraged landlords who used torent long term to concentrate on short-term rentals.

Geraldine Gilliland, a Los Angeles restaurateur, bought a 2,600-square-foot Malibu Road house in 2012 for $4.42 million, according topublic records. The house is currently offered for $35,000 a month forJune or September, and $50,000 a month for July or August, said Mr.Kinyon, the listing agent. Ms. Gilliland said that she initially rented itlong term, but recently began renting it seasonally.

“I kind of like the idea of family and friends using it when it’s offseason,” said Ms. Gilliland, who lives on a ranch in Malibu about 10minutes away.

HomeAway, a vacation-rental website based in Austin, Texas, lists 276properties in Malibu, more than twice as many as it did in 2009; overhalf of them charge over $500 a night, according to Jon Gray, chiefrevenue officer.

Airbnb says there are “more than 300” Malibu properties on its site.Last year, Airbnb and the City of Malibu reached an agreement inwhich the company would collect and pay the city a 12% transientoccupancy tax on income from listings on the site. Airbnb, whichrepresents “the lion’s share of properties, at least that we know of,” isthe only website to have signed such an agreement with the city, saidMatt Myerhoff, a spokesman for the City of Malibu.

Stacy Clunies-Ross manages two properties in Malibu owned by herfamily, including a 5,700-square-foot house on Broad Beach thatfetches about $100,000 a month in the summer. To fill in off-peakperiods, she lists the house for $3,000 to $5,000 a night on short-term

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Beachfront Getaways in Malibu »A look at summer rentals in Malibu, Calif., from a $750,000-a-monthmodern home, to a Cape Cod-style house that rents from $35,000 to$50,000 a month, depending on the season.

Real-estate executive Kurt Rappaport rents out his Malibu

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rental sites. She also rents the house out for film shoots: HBO isfilming a project there, she said. When the house is not leased, herparents stay there, she said.

Four years ago, the family was offered $16 million for the house, butthey turned it down, Ms. Clunies-Ross said. “It makes more moneythis way.”

Write to Katy McLaughlin at katy.mclaughlin@wsj.com

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