Bel Air’s finest modern mansion was listed at this week’s auction for $ 87.8 million. However, according to Alex Kadabi, who turned from a home seller dermatologist to a developer, the highest bid was just under $ 45.8 million.
“Awesome, terrifying, terrifying!” It was how Khadavi characterized the auction results to CNBC. He filed for Chapter 11 Bankruptcy Protection two weeks after he put his home on the market last year.
A property in a luxury district of Los Angeles, despite flashy facilities such as a stealth DJ booth that hydraulically rises from the living room floor, a black marble-covered car gallery, and a glass and marble bridge hanging above the front door. The auction failed The minimum amount Khadavi entertained to meet the $ 50 million reserve.
“No one told me this would be below this level,” he said.
Dr. Khadavi was sitting on a DJ booth rising from under the floor of his spec house in Bel Air.
Kadabi, who owes tens of millions of dollars to multiple creditors, wanted the auction to generate a selling price large enough to cover his debt, according to court filings. But doctors told CNBC that they weren’t happy that the auction that ended Monday night coincided with a sharp drop in both stocks and cryptocurrencies.
Khadavi also said he believes the deal with auctioneer Concierge Auctions has prevented the company from opening bids at reserved prices. So when the five-day auction started, he was shocked to start bidding at a price $ 10 million lower than the lowest price the auction house agreed to consider. Sellers believe that a lower than expected starting point set the stage for what happened next.
The bid was slow, with the highest bid being accepted on the final day of the auction, about $ 4.2 million below the reserve. The final offer of $ 46.8 million before the end of the auction was not achieved.
The auction screen grab is from Khadavi’s mobile phone.
The concierge auction did not comment on Kadabi’s confusion as to why the bid started below his reserves. The auctioneer did not reveal the number of bidders who actually bid on the auction. However, the company’s president, Chad Loffers, provided this statement by email.
“After a lively auction, bids are closed and high bids are in the hands of trustees. We are confident that over 80 qualified screenings have brought market value over the last 60 days. ”
A glass and marble bridge overlooks the living room and connects to the owner’s wings.
Mark & Tiffany Angeles / Aaron Carman Group
Sellers usually don’t have to accept bids below the lowest price, but the auction of Khadavi’s assets on 777 Sarbonne Road is a bit more complicated as it’s part of the bankruptcy proceedings. Khadavi told CNBC in early June that if the court reviewed and approved the best existing home offer, the sale would proceed, whether he liked it or not.
Khadavi said he is currently in a race to find an offer that exceeds the highest bid offered at the auction, and he is considering legal action against the auctioneer for what is called a “defective” auction. ..
“Honestly, I’m not happy,” said Aaron Carman, co-listed agent for Compass. “I wanted more”
But Mr. Carman said he didn’t think the auction was flawed. “After all, the highest bidders are the highest bidders,” said an agent who has been involved in several luxury real estate auctions.
It’s not uncommon for luxury properties to be on the market for long periods of time before they are finally auctioned, with a price cut of almost 50%. Based on CNBC’s review of recent ultra-luxury auctions In the top four mansions sold so far at the auction, the original asking price has been devalued by more than 68%.
Bel Air transactions include a court-approved 5% auction fee, according to the auctioneer’s website. This will be paid by the purchaser. That would make the property’s current offer just over $ 48 million. If the sale is approved in court, the condominium will be the fourth most expensive home ever sold at auction.