A sprawling Los Angeles megamansion considered the most expensive home in the country has fallen into receivership after the owner defaulted on over $165 million in debt.
The 105,000-square-foot hilltop estate, known as “The One,” in ritzy Bel Air has been placed into receivership by the Los Angeles County Superior Court, documents show.
Nile Niami, a flashy property developer, bought “The One” in 2012 and often touted the property as his “life mission,” according to CNBC.
The shopping mall-sized estate was expected to hit the market in 2017 for the whopping price of $500 million, but the mansion has been plagued by delays and funding issues.
The mansion extends a full quarter-mile along Stradella Road in Bel Air. It has nine bedrooms, multiple kitchens, its own nightclub, four-lane bowling alley, salon, gym, 50-seat theater, a running track and an underground garage for 50 cars, with two auto turntables.
It also boasts multiple pools, a jacuzzi and a moat that surrounds the house. The master bedroom suite alone is 4,000 square feet.
Every door and toilet in the house is electric and Niami had previously said he wanted to build a “jellyfish room” but it was too costly.
Construction on The One began at a time when the market for megamansions catering to billionaires was booming in California. But a construction rush has led to a glut of such homes, driving prices off their peaks.
Even as prices dropped, Niami pressed forward with his plans for the ultimate megamansion. He and his related LLC, Crestlloyd, ultimately borrowed more than $165 million to build and sell “The One.”
Hankey Capital, founded by Los Angeles billionaire Don Hankey, is the largest lender, having given over $115 million in loans on the property.
Yogi Securities Holdings, helmed by doctor-turned-real-estate-investor Joseph Englanoff, is in the project for over $36 million. And two other companies, Inferno Realty and Maybach Corporation Holdings, have lent about $7 million each.
The property also owes over $1 million in unpaid taxes and debt from concrete, air conditioning and tool companies.
Hankey hit Niami with a notice of default in March and by July, the Los Angeles County Superior Court ordered the property be placed into receivership, putting The One in the hands of Ted Lanes of Lanes Management, who will be responsible for preparing it for sale.
Lanes, as the receiver, will not take over ownership and liabilities of the property, but instead will complete the final work needed on the house, determine the creditors of the property and sell the house to pay off the lenders.
“What I would love to see happen is that the house gets completed, the certificate of occupancy is awarded and we have an orderly sale that maximizes the value,” Lanes told CNBC. “Hopefully, there will be sufficient proceeds from the sale to fund the secured and unsecured creditors and for the equity to realize some value.”
The price of the house and timing of the sale have not yet been determined, he added.
“It’s not an easy property to price,” Lanes said. “It’s truly unique.”