Foreclosed $51 Million "Billionaire's Row" Penthouse Sells At A 30% Discount

Tyler Durden's picture

Kola Aluko’s posh penthouse apartment in One57, one of Manhattan’s most expensive luxury towers, has finally sold after months of delays in what New York realtors agree is the most expensive residential foreclosure in city history.

The sale price - a paltry $36 million - suggests that the stress seen in the ultra-high-end real estate market in New York City has only worsened as buyers brace for a glut of new luxury buildings coming online in the coming years.

The buyer of unit 97, one of five bidders aside from the bank, wouldn’t answer questions, and his name wasn’t immediately available. Aluko purchased the building through shell companies. Recently, his assets have been seized by authorities in several countries as he’s wanted for bribing officials to receive lucrative contracts with his country’s state-owned oil company, Bloomberg reported.

Aluko bought the 6,240-square-foot (580-square-meter) residence in December 2014 for $50.9 million, according to New York City records. The sale yielded a compound annual return of about minus 11%.

And in September 2015, he took out an unusually large mortgage with an unusually short term: one year. The $35.3 million mortgage was obtained from Luxembourg-based lender Banque Havilland SA. The full payment of the loan was due one year later, according to court documents filed in connection with the foreclosure. The borrower failed to repay, and now Banque Havilland has forced a sale to recoup its funds.

“It’s probably the most-expensive foreclosure we’ve ever seen in luxury development,” said Donna Olshan, president of high-end Manhattan brokerage Olshan Realty Inc. “I don’t know of a foreclosure that’s larger than that."

WSJ reported in August that luxury condos in Billionaires’ Row have faced steep discounts as building owners have struggled to find buyers.

An analysis of condominium records shows the average discount on nine contracts signed at the Baccarat in 2016 was 22% below the peak asking prices of 2014, when the market was red hot. These include the sprawling 7,300-square-foot penthouse plus terrace that sold in June 2016 for $42.6 million, soon after the asking price was from $60 million to $54 million. Overall that amounted to a 29% price reduction.

One57 went on the market in 2011, and as of August there were still five units for sale. As we’ve previously reported, foreclosure proceedings were started in January. An auction scheduled for July was delayed after a creditor claimed Aluko owed it about $83 million for gasoline and jet fuel.

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Oxbo Rene's picture

If I'd of known about it, I would've snapped it up ! ! ! !

gmrpeabody's picture

I'd pay 2K a month if they need to rent it.., call me.

techpriest's picture

And this is how you get affordable housing: the market crashes and prices go to zero.

Tippoo Sultan's picture

Is this the same Kola Aluko who was wanted in the UK for "money laundering and fraud related crimes ?"

This appears to be more of a "special situation," to borrow 'Street lingo, rather than the beginning of a trend.

hmmmstrange's picture

Wow, only sold for 4864btc.

Troll Magnet's picture

Plus 60btc every year if you want to keep it. #propertytax

my new username's picture

In 7 years he will be clear to get another mortgage...

idontcare's picture

Sooner.  The rules don't apply at that level.

vienna_proxy's picture

do you expect authorities in ~several~ countries to sieze your assets in the near future? - yes - still approved

Dickweed Wang's picture

How (some of) the mighty have fallen . . .

moorewasthebestbond's picture

The mighty are soon to be selling their wives in return for a can of dog food.

Mena Arkansas's picture

Having all the billionaires conveniently gathered in upscale high-rises will make things a whole lot easier when the wheels come off.

Grenfell Tower comes to mind.

Troll Magnet's picture

Amazing that building didn’t collapse with all that fire. It’s a miracle! #911

ReaM's picture

There wasn't any jet fuel now was there?

idontcare's picture

Still $5M overpriced.

Dewey Cheatum and Howe's picture

1 down. Great to see the shitshow is finally now strating to take shape.

Obsidian Samctum's picture

Quit trying to made ads look like a real article. Nobody is dumb enough for this shit. Man.

Gap Admirer's picture

Use the Brave browser.  What ads?

Obsidian Samctum's picture

I take it back. There are dumb people who will read an ad and believe they’re reading an article.

Obsidian Samctum's picture

I take it back. There are dumb people who will read an ad and believe they’re reading an article.

Anon2017's picture

No one is telling you to read those silly articles from Phoenix and Goldcore. I haven't seen a regular ad from ZH in weeks.   

I Write Code's picture

Does that include paid utilities?

Squilliam Fancyson's picture

And you can immediately guess that the new owner is tribal...

CatsPaw's picture

So... the one who could afford it is a criminal?

Makes sense.