A 105,000-square-foot Los Angeles mega-mansion that was listed for $295 million sold at a bankruptcy auction for $141 million, ending a 10-year-saga of soaring debt and failed dreams.
The auction for the property, known as “The One,” ended Thursday night with the highest bid at $126 million. Including the buyer’s premium, the final sale price will be $141 million, according to Laura Brady, CEO of Concierge Auctions, which auctioned the home.
The price makes it the third most expensive home ever sold in Los Angeles, behind Marc Andreessen’s $177 million purchase last year of a Malibu compound and Jeff Bezos’ purchase of the former Jack Warner Estate in Beverly Hills for $165 million.
“The One” is also the most expensive home ever sold at auction in the U.S. and the world – far surpassing the $51 million price for a home auctioned last year in Beverly Park.
“It was a very competitive bidding process,” Brady said. “We had a strong field of bidders, with bidders from multiple countries.” Brady declined to comment on the buyer, who is expected to be revealed to the bankruptcy court in the coming days.
The sale brings to a close, at least for now, one of the most controversial high-end real-estate projects ever. It was built by Nile Niami, the charismatic and ambitious former Hollywood producer who turned to building some of the most lavish mansions in Beverly Hills and Bel Air to sell for profit. When he started “The One” more than a decade ago, Nile Niami, touted the property as his “life mission” and “the biggest, most expensive home in the urban world,” with an eventual asking price of $500 million.
Rising like a spaceship from the manicured hills of Bel Air, “The One” sits on 3.8 acres and features 21 bedrooms and 42 bathrooms. It has views of the Pacific Ocean, downtown Los Angeles and the San Gabriel Mountains. It has seven water features, including a massive moat that runs around the property. It has a nightclub, a full-service beauty salon, a wellness spa, a home theater that seats 40, a bowling alley, a 10,000-bottle wine cellar, 30-car garage and a 400-foot private outdoor running track.
Yet as building costs soared during construction, so did the problems. Niami’s debt grew to more than $190 million. The property was placed into receivership last year and then went into bankruptcy. As part of a bankruptcy agreement, it was listed for $295 million and, if no buyer emerged, put up for auction.
The hammer price is about $60 million less than the total debt on the house, meaning several lenders may still end up losing money on the home. The biggest lender was Los Angeles subprime lending magnate Don Hankey, who loaned more than $125 million to the project. People familiar with the sale said Hankey, who could have used his loan to “credit bid,” was not the final buyer.
Whoever purchased “The One” will also have to contend with a thicket of potential improvement and legal issues. According to the receiver’s report and an engineering study, the house has cracks in and around many of the pools and stonework, as well as signs of mold. It has several outstanding building and occupancy permits, and a local homeowner’s association is challenging its construction.
Real-estate executives speculate that the buyer may be another developer who plans to improve and change the property, get the proper permits and eventually re-sell it.
Niami couldn’t immediately be reached for comment Thursday.