The mega-mansion known as “The One” sold on Thursday for $126 million at a bankruptcy auction. That’s a huge discount from its $295 million listing price, even with a 12% auction premium bringing the total to around $141 million.
The Bel-Air property has set a new record for the most expensive home sold at auction, but it is well below the California sales record set by venture capitalist Marc Andreessen, who bought an estate in Malibu for 177 million dollars in October. The most-spent amount for a residence in the United States was $238 million by hedge fund mogul Ken Griffin for a New York penthouse in 2019. Several international sales topped $300 million.
The buyer will be disclosed by March 8, when paperwork must be submitted to U.S. Bankruptcy Court Judge Deborah Saltzman, who will hold a hearing later this month on approving the sale. . It is possible that the successful bidder is a limited liability company, a legal entity often used by the wealthy to conceal their real estate purchases.
At least three dozen potential buyers have visited the 944 Airole Way property in the past two months, including billionaires from the Middle East, Asia and California, The One listing agents said.
The online auction opened on Monday, with only a handful of participants bidding before the final hammer. Most of the action happened in the last few minutes.
The price was well below the roughly $190 million in debt the property is carrying, meaning many creditors will suffer losses.
The biggest creditor is Los Angeles billionaire Don Hankey, who loaned developer Nile Niami’s dream project $106 million. The lender says he owes him more than $130 million in secured debt, including money he provided during the bankruptcy to repair and spruce up the property for sale.
Hankey, who previously said he might bid for the property if it was significantly undervalued at auction, said he did not bid. He said the price should allow him to recoup the money he invested in the project, but added that he was surprised at how low the final price was.
“The guy who bought it just got a good deal. He’s got people willing to pay $50,000 a day just to do commercials and movies,” he said.
The 105,000 square foot hilltop home was marketed for $500 million several years ago while it was under construction, but failed to find a buyer. It was placed in bankruptcy in October after Hankey seized the defaulted $106 million debt from Crestlloyd, the limited liability company set up by Niami that legally owns the project.
The One is just the latest Los Angeles trophy house to wind up bankrupt following a costly development blitz in the region’s glitzy hills and coastal communities.
Concierge Auctions, a luxury online auction house that handled the sale of The One, set an auction record last year by selling a Beverly Park home for $51million – but it was still more than $100 million off its original asking price.
How much The One Would Go has been something of a parlor game in the luxury real estate community, with some believing it to be the ultimate trophy and others declaring it a white elephant.
The property includes a 4,000 square foot guest house, a viewing deck with cabanas, a private theater, a full-service spa, a nightclub, and even an outdoor running track and moat. It has 21 bedrooms and 42 full bathrooms.
However, the mansion could end up being a project for the buyer.
The house is not 100% complete and does not have a certificate of occupancy, pending approval from city inspectors on crucial permits for grading, electrical and other work. Additionally, it could have construction defects and zoning code violations, according to allegations in court documents.
The mansion has been described on the Concierge website as the “tallest in the urban world”, but according to many accounts, a 27-story house said to be 400,000 square feet owned by a billionaire in Mumbai, India, is believed to be largest in the world, outside the royal palaces. However, it may be the largest in the country.
Niami attempted to regain control of the property. In December, he offered to create a cryptocurrency called The One Coin that would be backed by the mansion and pay off all of the house’s debts. His spokesman said he would not comment on the sale.
Under the terms of the auction agreement, the winning bidder is legally obligated to close the sale by the end of the month or lose a deposit of $250,000.
In making her decision whether or not to approve the deal, the judge will consider whether she thinks the highest bidder has the financial means to complete the sale, its impact on creditors and other issues.
The second largest secured creditor is Inferno Investment, a company run by Julien Remillard, a longtime Canadian investor in Niami. Inferno Investment says it is owed $24 million. The third largest, at $14 million, is Yogi Securities, the investment vehicle of Joseph Englanoff, a Los Angeles doctor and another longtime Niami investor. The remaining secured and unsecured claims are significantly smaller.