Most expensive home in America defaults and heads for sale

A Los Angeles mega-mansion that was once slated to list for $500 million became the recipient after the owner defaulted on a loan and owed more than $165 million, according to court filings. .

The 105,000-square-foot Bel Air property, known as “The One,” has been put into use by the Los Angeles County Superior Court and is expected to be reassigned for a lower price in the coming months, according to people familiar with the property. .

The reception marks a stunning reversal of “The One” and its flashy developer, Nile Niami, who often describes the property as a “life mission” and “biggest, expensive home” best in the urban world.”

Scheduled to hit the market in 2017 with a price tag of $500 million, “The One” has been plagued by constant delays, funding issues, and a change in strategy. The house stretches like an 8-acre ultra-modern palace on top of a hill overlooking LA. It has nine bedrooms, multiple kitchens, a nightclub, a four-lane bowling alley, a beauty salon, a gym, a 50-seat theater, a running track and an underground garage for 50 cars, with two turntables automatic. Its seven water features include multiple pools, a Jacuzzi, and a moat that surrounds the house. The master bedroom of the suite is 4,000 square meters. Every door in the house has electricity, along with all the toilets. Niami planned a “jelly room” and an ice bar, but both proved too expensive.

“There’s a lot of people out there with a lot of money — they want something that no one else can have,” Niami told CNBC in 2017. “That’s it.”

However, “The One” is one of dozens of mansions that emerged from the hills of Bel Air and Beverly Hills after 2014, when fashion mogul Bruce Makowsky sold a special Beverly Hills mansion for $70 million dollars and launch a new property in California. find gold. The construction boom – an arms race of infinity pools, candy walls, auto showrooms and banquet halls – has led to an overabundance of real estate. Many large apartments in LA, including some built by Niami, sell for much less than their asking price.

Even with prices falling, Niami is still heavily in debt to finish and promote “The One.” Over the past four years, Niami and his related LLC, Crestlloyd, have borrowed more than $165 million to build and sell “The One,” according to property documents.

The largest lender is Hankey Capital, founded by Los Angeles billionaire Don Hankey, which has more than $115 million in loans on properties. Yogi Securities Holdings, led by real estate investor-doctor Joseph Englanoff, has loaned “The One” more than $36 million. Two other companies, Inferno Realty and Maybach Corporation Holdings, provided loans worth $7 million each.

“The One” also has more than $1 million in unpaid taxes and debts from concrete, air-conditioning and tool companies.

Hankey served Niami with a notice of default in March. In July, the Los Angeles County Superior Court ordered the property to be placed in the receiver’s place and named Ted Lanes of Management Lanes as the recipient. According to the method of receipt, the property has defaulted to a recipient appointed by the court, who prepares to sell the property. In complex or large real estate projects, levies often take precedence over a foreclosure, where the lender or bank seizes the property.

Instead of taking over ownership and debts that could add to the risk and delay, the recipient will receive the necessary permits, complete any necessary construction work, make a list of creditors. and prepare to sell the house to repay the lenders. The admission also provides a notice period, when unpaid lenders, creditors and contractors can bring their cases.

Lanes said once he receives the proper permit and certificate of stay for “The One”, it will be put on the list. Price and timing are yet to be determined, he said.

“What I really want to happen is that the house is finished, the occupant certificate is awarded and we have an orderly sale that maximizes value,” he said. “Hopefully there will be enough proceeds from the sale to finance secured and unsecured creditors and let the equity realize some value.”

Niami has been marketing “The One” for years, with interviews and media photos and a special video tour in April with YouTube personality Michael Blakey, who advertised “the talent.” $500 million property” is “the largest and most expensive house in the world.” Niami also talked about his plans to turn the house into a media and commercial venture, using it to host a Netflix show. potential, events and startups.

Niami bankrupted his West Hollywood home last year, and a particular Beverly Hills mansion, which he marketed for $100 million, sold for $38 million to Englanoff, one of real estate lenders in California.

Niami already has a listing agreement for “The One” with LA brokers Aaron Kirman of Compass and Rayni and Branden Williams of Williams & Williams Estates Group. Lanes said the plan under the listing agreement is to market the property for $288 million, but a final listing price has yet to be set.

It is unclear whether the property will sell for a high enough price to pay off the debt. The most expensive home ever sold in LA is the former Warner Estate in Beverly Hills, which sold to Jeff Bezos last year for $165 million. While the real estate market in Los Angeles has rebounded after Covid, especially in the high-end segment, “The One” may prove difficult to sell at its asking price.

“This is not an easy property to value,” says Lanes. “It’s really unique.”