After years of construction, foreclosure and bankruptcy, Bel-Air’s mega-name, known as “The One”, was sold. (Alan J. Shaben / Los Angeles Times)
The mega-name, known as “The One”, was sold on Thursday for $ 126 million in an insolvency auction. This is a huge discount of $ 295 million, even with a 12% auction fee, which leads to about $ 141 million.
The Bel-Air property set a record for the most expensive house sold at auction, but fell short of the California sales record set by venture capitalist Mark Andreessen, who bought a $ 177 million Malibu property in October. The most ever spent on a US residence was $ 238 million from hedge fund tycoon Ken Griffin for a penthouse in New York in 2019. Several international sales exceeded $ 300 million.
The buyer will be revealed by March 8, when the documents must be presented to US bankruptcy judge Deborah Salzman, who will hold a hearing later this month on whether to approve the sale. It is possible that the winning trader will be a limited liability company, a legal entity that is often used by the rich to hide their real estate purchases.
More than three dozen potential buyers have toured the 944 Airole Way property in the past few months, including billionaires from the Middle East, Asia and California, The One agents said.
Concierge Auctions, which sells, said its auction site has attracted attention from 170 countries, including Australia, the United Kingdom, Germany, France and Italy – and has generated about 2,800 leads.
However, after the opening of the online auction on Monday, only five bidders from the United States and New Zealand took part. Most of the action took place in the last few minutes.
The bidding starts on Monday at The One, which occupies the top of Bel Air. (Alan J. Shaben / Los Angeles Times)
Agent Brent Chang of Compass said the results were a warning story and could make builders think of smaller sizes, given that many huge mansions have gone bankrupt in the past few years. He also wondered if the weather was out of the question, given Russia’s invasion of Ukraine.
“The pool of buyers for this is very small, and with everything that’s happening in Russia, all of a sudden those Russian billionaires who may have been your best choice to buy it are withdrawing,” he said.
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The property debt was initially about $ 180 million, but has since risen to $ 256 million as more creditors have filed lawsuits, according to a March 2 lawsuit. This means that many creditors will suffer losses – although most of the auction house’s 12% fee will be returned to the bankruptcy estate, which is not a typical agreement.
The biggest single lender is Los Angeles billionaire Don Hankey, who donated $ 106 million to developer Neil Niami’s dream project. The creditor says he owes more than $ 130 million in secured debt, including the money he provided in bankruptcy to repair and disperse the property for sale.
Hanki, who previously said he could bid for the property if its price is greatly reduced at the auction, said he had not made an offer. He said the sale should allow him to recoup the money he had invested in the project, but added that he was surprised at how low the final price was.
“The man who bought it just got a great deal. “He has people willing to pay $ 50,000 a day just to make commercials and movies,” Hankey said.
The hilltop house, which is said to be 105,000 square feet, was put on the market for $ 500 million a few years ago while it was under construction, but found no buyer. It was declared bankrupt in October after Hankey seized $ 106 million in debt outstanding from Crestlloyd, a limited liability company set up by Niami that legally owns the project.
Recovery specialist Lawrence Perkins, who was put in charge of Crestlloyd when the home was declared bankrupt, said the “market speaks” at the auction. However, he also said it was his responsibility to continue making late bids that could exceed the auction price.
“I have an obligation if someone comes in and has a better offer. We don’t invite them, but it’s not closed until it’s closed,” he said. “Some people don’t want to bid.”
Broker Stephen Shapiro, founder of the Westside Estate Agency, said the low price reflected Niami’s “out-of-control ego,” which built a huge house that wasn’t actually home.
“Most builders build houses where people can live,” he said. “He built one, thinking that there would be a demand for this scandalous house of the highest level.”
Niami is trying to regain control of the property. In December, he proposed the creation of a cryptocurrency called The One Coin, which will be backed by the mansion and pay off all home debts.
Prior to the auction, a Niami spokesman said the developer would not comment on the auction. He could not be found for immediate comment on Thursday.
The One is just the latest trophy in Los Angeles to go bankrupt after a tumultuous costly development in the region’s glittering hills and coastal communities.
Concierge Auctions set a record last year when it sold a home in Beverly Park for $ 51 million – but that was still more than $ 100 million of the original asking price. The concierge said The One is the largest home ever sold at auction.
How much The One would cost was a kind of salon game in the luxury property community, with some thinking it was the best trophy home and others calling it a white elephant.
The property includes a 4,000-square-foot guest house, a heavenly deck with cabins, a private theater, a full-service spa, a nightclub and even an outdoor jogging track and ditch. It has 21 bedrooms and 42 full bathrooms.
Amenities include a bowling alley, a nightclub and plenty of space for swimming. (Alan J. Shaben / Los Angeles Times)
However, the mansion may be a project for the buyer.
The house is not 100% finished and has no certificate of use, pending approval by city inspectors for crucial permits for grading, electrical and other works. In addition, according to court documents, there may be construction defects and violations of the regulatory code.
The mansion has been described on the Concierge website as “the largest in the urban world”, but by many accounts a 27-storey house, which is said to be 400,000 square feet, owned by a billionaire in Mumbai, India, is considered the most the largest in the world, outside the royal palaces. However, it may be the largest in the country.
Under the terms of the tender, the winning trader has a legal obligation to complete the sale by the end of the month or lose a $ 250,000 deposit.
In deciding whether to approve the deal, the judge will determine whether it believes that the bidder has the financial means to complete the sale, its impact on creditors and other issues.
Other major lenders include Inferno Investment, a company run by Julien Remillard, a longtime Canadian investor at Niami’s. Inferno says he owes $ 24 million. Yogi Securities, the investment vehicle of Joseph Englanoff, a Los Angeles-based physician and another longtime investor in Niami, says it owes $ 14 million.
Compass agent Brett Parsons said he thought the price reflected the value of the hilltop property with its spectacular city views rather than the house itself.
“It is unfortunate that the precious resources of Mother Nature can be looted for ridiculous trophies,” he said.
The mega-mansion has a bowling alley with four lanes. (Alan J. Shaben / Los Angeles Times)
“Times clerk Jack Fleming contributed to this report.”
This story originally appeared in the Los Angeles Times.