Foreclosure looms infamous $500M mega-mansion ‘The One’

[drcoastline]

For years, spec developer Nile Niami has teased “The One” — a 100,000-square-foot mega-mansion in Bel-Air that he hoped to sell for $500 million. But his plans are now in peril.

Niami, known for his brazen personality and wildly ambitious real estate projects, borrowed $82.5 million from Hankey Capital in 2018 to build the extravagant home. Over the last three years, that debt has ballooned to more than $110 million, and Hankey wants its money.

According to a document obtained by The Times, the lender just served Niami a notice of default on the prized property, which is considered the first step in the foreclosure process. If Niami can’t repay the loan in 90 days, Hankey could force a sale of the home.

Listing agents Rayni and Branden Williams of Williams & Williams at the Beverly Hills Estates and Aaron Kirman of the Aaron Kirman Group at Compass could not be reached for comment.

“We felt the owner of ‘The One’ was distracted from the job at hand, which is to bring the biggest and best house in the United States to market for sale,” said Don Hankey, chairman of Hankey Investment Co. “We hope our actions will kick off the official listing.”

There are multiple solutions for Niami to avoid a forced sale of the property, which include paying back all or at least some of the loan or coming to an alternative agreement with the lender. But such sales, even for prized properties, are not without precedent.

In 2019, the owners of the famed Mountain in Beverly Hills — a 157-acre lot considered the city’s finest piece of undeveloped land — faced a foreclosure sale due to $200 million in unpaid loans. They tried to delay the sale by declaring bankruptcy, but their efforts were unsuccessful, and the land was auctioned off outside a Pomona courthouse.

Default notices are nothing new for Niami. He received two in 2020 alone: one for a debt of $10 million on a property he owns at 1369 Londonderry Place in the Hollywood Hills, and one for a debt of $23.4 million on a mansion at 10701 Bellagio Road that he’s currently trying to sell for $59 million in Bel-Air.

He took out a $200,000 loan from Compass for a separate Bel-Air property he was trying to sell in 2019, and the real estate company sued him in October for failing to repay it, records show.

Last year, he told the Wall Street Journal that there have been multiple times when he was forced to stop construction because of a lack of financing. He also said that he has funded construction with cash from sales of other properties.

Profitable sales have been hard to come by for Niami lately. After listing an over-the-top Beverly Hills home dubbed “Opus” for $100 million, he sold it last year for $38.3 million. The buyer turned out to be Joseph Englanoff, one of Niami’s lenders for the project. Englanoff took control of the property, rebranded it and sold it for $47 million later that year.

In 2019, Niami tried to sell a West Hollywood home with a glass-bottomed pool and cryogenic chamber for $55 million but couldn’t find a buyer. Late last year, he put the property into bankruptcy.

All his homes boast otherworldly amenities — champagne vaults, animal skeletons, for instance — but in terms of raw ambition, the One takes the cake. Even among the colossal estates of Bel-Air, the house is over the top.

The estate stretches across eight acres on a promontory lot and centers on a 100,000-square-foot palace that looks more like a futuristic spacecraft or a Bond villain’s lair than a home.

Niami ended up axing some of the amenities he teased, including a jellyfish tank and a frozen room with an ice bar, but he still saved space for a nightclub, four-lane bowling alley, 50-seat theater, juice bar, putting green, golf simulator, beauty salon, yoga platform and five swimming pools. The primary suite alone is bigger than the average U.S. home at 4,000 square feet.

He originally planned to list it for $500 million in 2017, but the home still hasn’t hit the market — a costly delay since the property’s annual tax bill comes in at more than $1 million. Last summer, he posted a cryptic video on his Instagram account declaring it was 10 weeks away from completion, saying, “Seven years ago, I had an idea to create the biggest, most expensive house in the urban world: The One Bel-Air. And I did it.”

The home still has not officially surfaced for sale, but Niami did recently release a Google Forms application that asks prospective buyers to supply their name, email address, phone number and proof of funds along with the question, “Which influencer did you find out from?”

In addition to the outstanding loans, Niami has also been fined five times for parties at his properties that violated L.A.’s coronavirus social distancing orders, according to the Daily Mail. The five violations made up a third of the 15 total fines handed out by the city from April to August last year.

[look 171]

divided the land and built homeless shelters or drug houses there. Some Hollyweird star should push for that instead of putting those goddamn things in other middle class or upper middle class neighborhoods of LA county.

[drcoastline]

Originally Posted by look 171

divided the land and built homeless shelters or drug houses there. Some Hollyweird star should push for that instead of putting those goddamn things in other middle class or upper middle class neighborhoods of LA county.

Interesting you say that. I was just reading Snta Monica wants to tear down an eight story parking garage and build a homeless sheler.

[look 171]

Originally Posted by drcoastline

Interesting you say that. I was just reading Snta Monica wants to tear down an eight story parking garage and build a homeless sheler.

Why the heck are you reading about Santa Monica all the way out in Jersey?

There are some wild ideas going around and there isn't siht anyone can do about it. Money, between politican and the various people's hand in that cookie jar boggles the mind.

They are looking for places to built shelters whereever possible and that doesn't matter what local residents say or feel about those projects. I say lets start in that place you mentioned in BH or near Pelosi's, our Gov. Newsome, or mayor's home or their businesses.

[look 171]

Originally Posted by drcoastline

Interesting you say that. I was just reading Snta Monica wants to tear down an eight story parking garage and build a homeless sheler.

I know exactly where that parking lot is too. Before the homeless gone wild in Santa Monica, that was the few large parking structure where tourist and others can park their vehicle and enjoy the beach. Since they chased out all the tourists and the locals don't go near the bums, like myself, the place is a mess and pretty empty compared to pre-covid. This will put the nail in the coffin for them, the businesses. Those goddamn politicians need to get hit by a Mack truck crossing the streets.

[drcoastline]

Originally Posted by look 171

Why the heck are you reading about Santa Monica all the way out in Jersey?

There are some wild ideas going around and there isn't siht anyone can do about it. Money, between politican and the various people's hand in that cookie jar boggles the mind.

They are looking for places to built shelters whereever possible and that doesn't matter what local residents say or feel about those projects. I say lets start in that place you mentioned in BH or near Pelosi's, our Gov. Newsome, or mayor's home or their businesses.

I'm not alowed to read about Santa Monica because I am in New Jersey?

EDIT: BTW- my OP was about a house in Belair.

[look 171]

Originally Posted by drcoastline

I'm not alowed to read about Santa Monica because I am in New Jersey?

No, I am only wondering. I should have included a smiling face on there.

[drcoastline]

Originally Posted by look 171

No, I am only wondering. I should have included a smiling face on there.

OK, no problem. Just like the original post, I read a story and I guess the alogrythm attaches something it deems simliar. It caught my interest and I read it. The story about the homeless shelter was actually about the mall and the loss of business and the store closings. The parking garage was actually a small part of the story. It seem the store closing are in large part to lack of help from the stimulus and now the supply issue. Very sad.

[pwd72s]

It's a lovely place...Hotel California.

[Jeff Hail]

Don Hankey is one of my old bosses. He owns North Hollywood Toyota as well as numerous properties in downtown Los Angeles, Westlake Financial, NowCom etc, etc, etc. He is a bright, calculated and shrewd business man. He will not lose any money on this, most likely double his money when everything clears. The former owners loss will be Dons gain. Its what he does and he has done it successfully for the last 40 years.

[porsche4life]

Originally Posted by Jeff Hail

Don Hankey is one of my old bosses. He owns North Hollywood Toyota as well as numerous properties in downtown Los Angeles, Westlake Financial, NowCom etc, etc, etc. He is a bright, calculated and shrewd business man. He will not lose any money on this, most likely double his money when everything clears. The former owners loss will be Dons gain. Its what he does and he has done it successfully for the last 40 years.

Haha I know nothing about him but this was my thought. He’ll end up owning it, consolidating the rest of the debt and selling it for like 250-300 and making some bank.

[Tidybuoy]

I personally have no interest in the mega mansions being built these days. Can you imagine if you and everyone on your block and all your friends had homes with movie theaters, bowling alleys, gyms, spas, hair salons, indoor pools, indoor sport courts, 25+ garages? You would never have any friends over because they have the same crap at their house. I feel sorry for these lonely people.

[aschen]

that house is terribly tacky and useless IMHO. I ran across a video tour of it on youtube recently. The developer seems like the kind of person I would avoid talking to at a party as well.

[mrbeverlyhills]

I see a lot of these places and have done over the years, mostly all in extremely poor taste and built for those who need the world to know that you are a very rich man with several underlying and quite serious personality disorders.

Funny but old money never buys anything so ostentatious and even most new money with good advisors (think Bezos, Ballmer) buy older, more tasteful places that at least have some flat land.

The one that really stood out for me had his and hers dental suites, just off the indoor pool and full professional spa. Full dental offices with x-ray, the whole shebang, better than my dentist has. I get it, you sell arms to 3rd world countries and can't always go out, but his and hers? What, she can't wait till you are finished?

[MRM]

I gained an unlikely education on developing multimillion dollar houses over the years. I even once had a client fly me out to Beverly Hills with the plan to obtain a lot and build a spec mega mansion, although perhaps not one in the $500 million range. There are a lot of weird developers and there are a lot of games developers play, but there is clearly something not right going on with this property. No developer holds a property longer than they need to and no one gets into carrying costs like that without an exit plan. I can't tell what the scam is, but the developer is up to something. The creditor seems to have a good handle on things. As long as he dots his eyes and crosses his tees he'll recoup his loan amount and may end up owning collateral more valuable than the loan.

There is actually a market for spec mega mansions, even in the tens of millions of dollar range, but this house violates almost all the rules of how to do it successfully. The number one rule is location. The premium quality of the house has to be the location and if it isn't exclusive enough it won't matter what you build. No one pays for a premium house on an average piece of land. Second, the house has to have some style and desirability to it, but it should be plain vanilla. The house has to be completely finished to attract a buyer, but it needs to be so thinly finished that the new owner basically deconstructs the finishings and redoes the house his own way. The deal is that people who want $50 million compounds want the house customized to their needs and tastes but they don't want to spend the five years it takes to build a house as they imagine it. The solution is a spec built house that shows them enough to imagine the final product and is easy to put the final custom veneer onto the structure in a matter of months, rather than years.

With this house the location is desirable, but not so unique that people would buy the house just for the land. The house is customized to someone's taste, but someone smart enough to have a half billion to spend isn't stupid enough to let someone else define their taste for them. I suspect the developer is using the house for publicity. He probably spent $15-$20 million in construction and is living off the rest of the construction loan. He may default and let the property go to the creditor and still get out of it OK because he spent less than the loan on the property. That's the only thing I can think of, but it seems like a strange way of doing business.

[daepp]

Sorry, but I'm thinking someone's taking a loss on this. Not that I could afford even the entryway, but I don't like it and I don't like the developer:

[john70t]

I agree with the perspectives above.
There are mansions and there are mansions. That one has neither land nor water access, which are both already readily available in the sub-$100M range.
The financials being reported and valuation are all over the map, and this could turn out to be tax-deductible, insurance, or money-laundering income situation.
Not many lenders put down a third of a billion dollars of their own money without oversight, a solid game plan, and a ready market.

[mrbeverlyhills]

MRM is entirely correct (well he does drive a 964), the plan is to hype the property to the extant that a second tier lender will lend so much on the property that finishing it is rendered moot, no further profit to finish it.

The "Mountaintop" cited by the OP was sold at a foreclosure sale but it sold to the 3rd TD lender subject to the 1st 2 liens. So not for actual cash, the 3rd had to step in and now is servicing the 1st 2 loans

[tabs]

The greater LA area is great if you like living in an ant hill. Back in the day it was a totally different story.

I have to agree that a Mega Manison services ego. I can see paying for land value but not for gauche.. a modest 12000 sq mid 20's style Italianiate villa on a hill top over looking the Pacific in Monceito would suffice.

[tabs]

A person wid a big big budget is gona remodel or build himself. Why buy from a spec builder?

Land value dictates sq footage of the house. Ya caint put 2000 sq on a million $ lot. $ per sq ft.