With at least three mechanics liens filed alongside hundreds of millions in debts, the Los Angeles estate dubbed “The One” may not belong to anyone any time soon, as the property is facing debts of more than $165 million in debts owed to lenders and creditors — with thousands in non-payment owed to contractors.
After owner Crestlloyd, LLC defaulted on its debts, a July 2021 action by the Los Angeles County Superior Court ordered that the property should be placed into receivership, making its sale imminent — though not likely under the terms the owners originally expected.
The property has an impressive place within Los Angeles — developer Nile Niami noted in 2017 that “In one eye-line, you have from downtown L.A. to the ocean to The Getty” — and the 10,000 square foot mansion estate was originally intended to list at the gargantuan sum of $500 million.
“There’s a lot of people out there with a lot of money — they want something no one else can have,” developer and Crestlloyd owner Nile Niami said of the property — then dubbed “the most expensive home in America” — in 2017. “This is it.”
“When you have something that’s as rare as the Mona Lisa, you can command whatever you want for it,” Niami added in January 2020. “When the house was started, I had no basis to ask $500 million — now there are so many triple-digit sales in L.A. and the world that the asking price is not unreasonable anymore.”
Outside of the company’s liens, the development of the project has also been expensive, with Crestlloyd having to borrow from multiple different lenders to finance construction.
According to documents, as part of the foreclosure process, Crestlloyd was served with a default notice on the property’s debts in March 2021, while June 2021 saw the company served with a notice of trustee’s sale from Hankey Capital which detailed that Crestlloyd owed the lender a total of $116,169,627.86.
The property also received loans from Yogi Securities Holdings — which supplied more than $36 million to the project — Inferno Realty, and Maybach Corporation Holdings (with each of the latter two providing loans of $7 million).
Construction liens are among the many things weighing down ‘The One’
Outside of loan debts, the property’s owners also have dealt with non-payment in the property’s construction, with payment issues going back multiple years — as well as three current claims on the property coming to $66,026.95, indicating just how much construction work has dragged on even as the property was originally intended to be finished in 2018.
A September 8, 2021, claim by Parquet By Dian noted non-payment in the amount of $40,846 for materials, while a June 30, 2021, claim by BMC West, LLC detailed debt of $2,398 for building materials, both of which are still active.
Similarly, 2021 saw at least two more liens that are still active on the property: A June 11, 2021, claim by JMS Air Conditioning and Appliance Services, Inc. for $51,290 noted that the company was hired for new construction to install the estate’s HVAC systems, providing “all the labor and materials,” while Calgrove Rentals Inc. executed a lien claim for $12,338.95 on May 21, 2021, for heavy equipment rental.
The recent lien claims aren’t the only ones that the project has dealt with. Previous Levelset coverage noted that multiple contractors — including Residential Elevators, LLC, Rolls Scaffold, and American Rentals, Inc. — filed liens coming to a total of $325,610.66 in June, August, and September 2020, which were resolved prior to 2021’s filings.
Prior to this, Residential Elevators had filed a lien for $16,000 in September 2019 which was released in February 2020, indicating a pattern of difficulty associated with the payment for the project’s contractors.
Though the lien claims filed against the property are largely overshadowed in price point by the property’s staggering debts to its lenders, it’s important to note that the amount of overall debt makes it harder for lien claimants to receive payment.
Receivership is different from foreclosure — but it could be just as difficult for creditors to get paid
As receiver Ted Lanes noted in September 2021, the terms of the property’s receivership should result in a sale as soon as permits and other documentation can be obtained. Unlike foreclosure actions, receivership temporarily removes an owner from its control over the property, ensuring that a third party can properly act to handle the property’s debts.
The significant amount of debt Crestlloyd is in makes the sale of the house even more pivotal, as the home may not sell at a high enough price to cover it all.
According to a February 2020 CNBC report, Jeffrey Bezos’ purchase of a notable Beverly Hills mansion for $165 million is believed to be the highest price ever paid for a piece of real estate in Los Angeles — a number that would just barely cover the debts “The One” is facing.
“What I would love to see happen is that the house gets completed, the certificate of occupancy is awarded and we have an orderly sale that maximizes the value,” receiver Ted Lanes said. “Hopefully, there will be sufficient proceeds from the sale to fund the secured and unsecured creditors and for the equity to realize some value.”
“It’s not an easy property to price,” Lanes added. “It’s truly unique.”