$ 500 million mega villa defaults with $ 100 million in debt and forces a sale

In an Instagram post last summer, Nile Niami, the developer of the project, introduced the 105,000-square-foot house with seven pools, a garage for 50 cars, a wine cellar with 10,000 bottles, and even its own nightclub. Advertised as the largest and most expensive urban property in the world, “The One” should hit the market for $ 500 million, according to the Niami video posted on Instagram. But it has suffered many delays and complications and is now facing a court-ordered sale to pay off debts.

Niami borrowed $ 82.5 million from Hankey Capital in 2018 to continue building the home. But in March of this year, Hankey issued a reminder sending the property off to a foreclosure sale. Niami had 90 days to pay off or renegotiate the debt, which court documents said had grown to more than $ 110 million.

Since no payment had been made by July, the house was placed under a court order, which is an alternative to foreclosure in complicated real estate transactions. The bankruptcy trustee, Theodore Lanes of Lanes Management Services, is charged with settling the property’s debts, selling the property and, ideally, repaying lenders and creditors with the proceeds.

Hankey Capital declined to comment on the default or receivables. Nile Niami did not respond to a request for comment.

But despite promises from Niami that the property is almost ready – he said it would be “probably another four weeks” during a video tour of the house released in April – there is still a complicated hole list and the property is not ready for use the market, according to the first report filed by Lanes with the court.

Some points that are outlined are fairly typical final details in building a house – for example, the gas company does not offer any service until an occupancy certificate has been issued. But others are specific to the property: The permit to build a commercial catering kitchen has been refused and this space remains empty.

Lanes said in an email to CNN Business that he is still learning about new issues that need to be addressed, including getting the plans and permits and agreements with artists whose work is in the house, a furniture production company and the gardener .

“It’s a pretty long list,” he said.

Other issues the property is facing, the report says: Insurance expired in early 2021, challenges from social media users to sneak into the property have led to intruders.

“Anything that would be covered by security would take precedence,” Lanes said in his email. “As with the other projects, they will all be assessed on the basis of the eligibility requirements. If they are compulsory for the eligibility certificate, priority will be given to them.”

The house also has more than $ 2 million in unpaid taxes and bills to suppliers for concrete, air conditioning, and scaffolding, according to Lane’s report.

“This is a very complicated property with some unanswered questions,” Lanes wrote in his report. “Right now the focus is on getting full insurance and developing a schedule and budget to secure proof of use to maximize value and make the property more marketable.”

‘The one’

After almost a decade of construction, the house is on a hill in Bel Air overlooking the Los Angeles Basin. The colossal home has 20 bedrooms, including eight bedrooms for staff and a three-bedroom guest house, around 6 elevators, a library, a cigar room, and a candy room, according to a two-part home tour posted on YouTube in April.

The house is advertised as having a four-lane bowling alley, a cinema with 50 seats, a putting green, a wellness center and gym, a beauty salon, a juice bar and a tennis court.

Again and again despite Niami teased that the house was weeks away from launch, it never arrived.

Instead, Niami unloaded other lots last year – at discounted rates.

Earlier this year, he sold a mansion in West Hollywood for $ 26 million, well below a previous asking price of $ 35 million, according to property records reported on Realtor.com. In April, he sold a mansion in Bel Air for $ 36 million, a little more than half the original purchase price of $ 65 million in 2018, according to Zillow Hollywood Hills and another with debt of $ 23.4 million US dollars for a house in Bel Air, according to the Los Angeles Times.

And Niami is being sued by other creditors for their money. Real estate firm Compass is suing for failure to pay a $ 200,000 loan he took out while trying to sell another home in Bel Air, according to court records.

It is not clear at what price “The One” will ultimately be listed or when it will be launched.

“I’m still evaluating suggestions and strategies from various potential stockbrokers,” Lanes said in an email.

Even though the property hadn’t hit the market earlier this year, a Google Forms application was waiting for potential buyers to fill out. In addition to the contact information, only one question is asked: “Which influencer did you find out from?” Several social media influencers have already presented it. Last April, Niami gave YouTube personality Michael Blakey a home tour. The tour offers an insight into the night club with VIP area and a tour of the 4,000 square meter master suite with its own pool.

“I gave them everything here,” Niami said in the video. “We have everything in this house that one could wish for.”

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