The owner of the country's most expensive house, dubbed "The One", has defaulted on $165 million in debt.
The megamansion, once expected to sell for $500 million in Los Angeles, was placed into receivership by the Los Angeles County Superior Court and will be re-listed for sale at a lower price.
The property's creator, Nile Niami, once called the property his "life mission".
The house suffered from "repeated delays, funding problems and changing strategies," according to CNBC.
Recall, we noted the property faced default back in March of this year when we reported Niami was delinquent on a $82.5 million construction loan from Hankey Capital for the 100,000-square-foot mega-mansion in Bel-Air. In the last three years, the property's debt has surged to as high as $110 million, we noted.
Niami has had bad luck over the last year and a half. He sold an LA mansion called "Opus" that was once listed for $100 million for a 50% haircut during the pandemic.
According to a document obtained by The Times earlier this year, Hankey, the lender, who is was aware of market conditions, wanted their money back and slapped Niami with a default notice. The developer had just 90 days from that notice to repay the loan or restructure the agreement in some way so that Hankey doesn't force the sale of the home.
That obviously didn't happen. Hankey said at the time:
"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."
Niami began constructing the 100,000-square-foot mega-mansion in 2013 as part of a speculative bet on the LA mansion market. But over the years, economic conditions have morphed from party to pandemic. Bets on housing in metro areas have gone sour in the recent year as people exit cities for rural communities.
"Default notices are nothing new for Niami," said The Times back in March. In 2020 alone, the developer received a default notice for $10 million on a property on 369 Londonderry Place in the Hollywood Hills, and one for a debt of $23.4 million on a mansion at 10701 Bellagio Road.
Last summer, he posted a video on his Instagram account saying The One was a couple of months away from completion.
"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."
You sure did, Nile.