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This could be America's priciest home - if it can find a buyer
AMERICA'S priciest home is finally getting its finishing touches. Seven years after he started working on "The One", a 9,290-sq m mansion in Bel-Air, movie producer turned developer Nile Niami says he is just about ready to test the market with his ballyhooed US$500 million asking price.
Replete with a nightclub, four swimming pools, bowling alley and 360-degree vistas of sun-dappled southern California, the symbol of America's latest gilded age has generated a flood of media coverage since the proposed price was announced in 2015.
While permit problems, construction delays and financing issues have exposed the struggles of building luxury homes on speculation and raised questions about whether the project high above Los Angeles would ever be finished, Mr Niami says he is almost done.
He is not backing off the lofty price tag, which would make the house the most expensive in America.
"When you have something that's as rare as the Mona Lisa, you can command whatever you want for it," he said in an interview, arguing that recent nine-figure property deals in Los Angeles and elsewhere are proof that his pricing strategy was not just about generating press.
"When the house was started, I had no basis to ask US$500 million. Now there are so many triple-digit sales in LA and the world that the asking price is not unreasonable anymore."
Mr Niami admits the pressure of his development odyssey has aged him prematurely. Building mega-mansions without a buyer lined up can be precarious.
Cost overruns and delays are common, carrying costs are high, and shifting appetites for luxury are hard to predict.
While a project as eye-popping as The One grabs headlines, the amenities and specific design can ultimately narrow the pool of potential buyers, said appraiser Jonathan Miller, president of the real estate appraisal and consulting firm Miller Samuel.
"The problem is, the more amenities you add, the more you personalise the property," he said.
"Even though the intention is to draw eyeballs to the property, you are also personalising it, which may reduce the size of the market pie. It's a very small, very tight market."
Mr Niami says that is not a problem. Los Angeles has tried to limit the construction of new mega-mansions, meaning nothing like The One can be built again, the developer said.
While one amenity that got a lot of attention - a room with tanks of live jellyfish lining the walls - has been dropped because it was too much work, Mr Niami said he has got something planned that is "even better".
He has not yet let anyone inside the property, but says the special features have helped draw interest from potential buyers.
He is talking to them now, but declined to provide details, citing privacy issues. The One's unveiling will happen once the final interior decorating is done, he said.
"I've had potential buyers a long time on this," he said. "We have a list of very real, verifiable buyers that we will bring in soon."
Pricing homes above their market value, a strategy known as "aspirational pricing", is a way for a developer to get attention for ultra-luxury listings.
A sale at the half-billion-dollar asking price would be more than double the biggest residential real estate deal in the US to date - a US$238 million penthouse purchased by Citadel founder Ken Griffin in Manhattan. Mr Niami points out that Mr Griffin's place is an apartment, with no land, while The One sits on 12,141 sq m.
"The Billionaire", another Bel-Air spec house that briefly was the most-expensive home for sale in America, was originally listed by developer Bruce Makowsky for US$250 million.
The 3,530-sq m mansion, with wine cellars, pools, a bowling alley, helipad and "candy room", sold for US$94 million in October, a 62 per cent price cut.
A Los Angeles native raised by a single mother who was a special education teacher, Mr Niami started out as a makeup artist in the movie industry.
He eventually became a producer and his credits include The Patriot, starring Steven Seagal, and Point Blank with Mickey Rourke.
His turn to real estate came when he began remodelling condos. Mr Niami has two additional multimillion-dollar projects in Bel-Air.
On a neighbouring hillside, another of his properties, 10701 Bellagio Road, took three price cuts after being listed in 2018 for US$65 million.
A notice of intent to revoke permits on that property, and on another US$65 million Niami-owned mansion directly behind it, were issued by the Los Angeles department of building and safety.
Without those permits, the properties cannot be legally occupied. After several meetings, the issues are close to being resolved, said a spokesman for the Los Angeles department of building and safety.
Still, the properties have been taken off the market, he said.
That leaves The One. Mr Niami took out a two-year US$82.5 million loan from Hankey Capital, which specialises in high-interest bridge financing, to help finish the construction.
He is current on the debt payments and faces an October 2020 deadline to repay the money, said Hankey.
Mr Niami declined to comment on the rate of his loan.
While very few super-luxury homes sell each year, there was an uptick last year, when 23 homes went for US$50 million or more in the US, the most since 2014, said Mr Miller.
Six of those sold for at least US$100 million. "The One is absolutely no issue," Mr Niami said.
"The value is definitely there." BLOOMBERG