Mega mansion flop: hyped LA home sells for less than half its $500m asking price | California

A Bel Air mega mansion marketed as “America’s most expensive residence” sold in an bankruptcy auction on Thursday with a winning bid of $126m, a fraction of its reported original asking price of half a billion dollars.

The 21-bedroom home – described as “twice as big as the White House” – has been derided as much as praised, making its sale a hotly anticipated event. The elite team of realtors behind the auction touted it as the ultimate dream estate but others called it a “giant white elephant” and “one of the ugliest homes I’ve ever seen”. The New York Post labeled it “the latest example of a hyped Los Angeles mega mansion that failed to perform”, and suggested its failure to meet the listing price meant that the city’s “cheeseball” taste in real estate might be starting to improve.

With a final sale price of roughly $141m, which included the winning bid plus commissions and fees, the property did not even bring in half of its listing price of $295m.

Developers and real estate agents had dubbed the property “The One”, and said a residence of its scale would never be built again in Los Angeles. The 100,000 sq foot hilltop mansion built over the last decade is surrounded on three sides by a large moat and has 360 degree views of Los Angeles, the mountains and the Pacific Ocean. Its amenities include 42 full bathrooms and 7 half bathrooms, a nightclub, a private running track, a 40-seat movie screening room, a juice bar, a cigar lounge, a “philanthropy pavilion”, a 30-plus car garage with two car-display turntables, a 10,000-bottle wine cellar, and five pools and other “water features”, including a private pool to accompany the master bedroom. There is also a bowling alley, with four lanes.

Despite its hefty price tag, the property comes with a host of issues. It has been mired in legal battles and bankruptcy proceedings, and its current auction, which is being overseen by a bankruptcy court, was postponed several times to try to attract more potential wealthy buyers. Of concern to those buyers, The One still does not have a certificate of occupancy, the final health and safety permit needed to certify that it’s ready for residents to actually move in, and it still needs some “finishing touches”, as one realtor put it, since its construction is not complete.

The strikingly low price is most likely a result of the unfinished state of the property, and the amount of additional work that will be necessary “to get it into a condition where it can be occupied”, said Byron Moldo, a Los Angeles attorney specializing in bankruptcy law, and does not necessarily mean the era of the mega mansion is over.

A court-appointed receiver had estimated the property needed at least $10m to fix problems such as cracked marble and water leakage, the Los Angeles Times reported. The prospect of dealing with a $141m fixer-upper “could have had a large impact in terms of perhaps limiting the number of interested buyers, and how much they’re prepared to pay”, Moldo said.

While the identity of the buyer must be disclosed as part of the ongoing bankruptcy proceedings, it might be a corporation or an LLC designed to shield the identity of the purchaser, he said. A bankruptcy court judge will review and approve the sale later this month.

According to bankruptcy court records, the current debt on the property totals $191m, the Los Angeles Time reported. With a sale price tens of millions of dollars below that, some of the creditors who loaned money to build the mansion will probably get only partial repayment, and some may get nothing at all, Moldo said. The judge will also oversee disputes over who gets how much money from the property’s much-delayed sale.

Niles Niami, the mansion developer who built The One, and described his aesthetic, simply, as “badass”, had floated increasingly desperate plans to avoid auctioning it off, the Los Angeles Times reported, including turning it into an events space for boxing matches and holographic appearances of dead celebrities such as Michael Jackson and Whitney Houston, and making a cryptocurrency called “The One Coin” backed by the value of the property. Niami did not immediately respond to attempts to contact him after the auction’s close.

However divisive, the sale of The One is consistent with a pandemic-driven shift in the tastes of the super-rich, said Chad Roffers, the president of Concierge Auctions, which conducted the online sale. While the world’s wealthy have recently tended to favor smaller, well-placed apartments in major cities (the previous most expensive US home was a $238m for a New York City penthouse), the experience of “being in a lockdown” has seen demand for “really big” properties surge – a trend that harks back to the mega mansions of the early aughts.

While in many promotional photographs The One resembles a giant, frigid airport terminal, real estate agents involved with the sale have said that, in person, the house is full of thoughtful touches and very livable.

While the participants in the auction were anonymous to the public, Roffers, the president of the online auction house, said their clients typically fit a certain profile: “Their world is private jets that they own, or at least share,” he said. “Some people are into art, some people are into wine, some people are into cars, some people are into everything. We really identify a niche of people who are property collectors. They’re always on the lookout for a unique property.”

Of his company’s roughly 8,000 verified private clients, he said, 267 are billionaires. For these types of clients, The One has an obvious appeal: “Just the sheer magnitude of it is attractive to the right person,” he said.

The much-hyped online auction for The One played out against the backdrop of an escalating war in Ukraine, as Russian oligarchs faced new financial sanctions, and at least one saw his giant yacht seized by the French government.

While the context of shelling in Ukraine and massive economic sanctions on Russia was “disturbing” and likely to be on everyone’s minds, Roffers said in advance of the auction that he did not think it would affect the bidding. There were thousands of documented billionaires across the world, he said, “and most of them are from somewhere other than that part of Europe”.

But after months of debate and speculation, the auction for The One on Thursday evening played out in a sluggish fashion, with only four bidders in total. In the last half hour, when online auctions typically heat up, there was still almost no movement. Only in the final two minutes did the price move above $70m, as a dueling pair of anonymous bidders pushed the price slightly above $100m.

The $141m final price tag is not a record-breaking price for the sale of a residential property in the US, or even in California, where venture capitalist Marc Andreessen spent $177m last year on a Malibu estate, breaking a previous $165m California residential property record set by Jeff Bezos.

It does break a record in a more technical category. The handful of bids on the property in the early days of the auction, which put its price at $70m, “already surpassed the highest US record for a property sold at auction”, Roffers said, which he said was $51m for a Beverly Hills mansion in 2021.