This flashy Bel Air mansion that was listed at $87.8million has been auctioned off – and now the seller is furious
An over-the-top modern mansion in Bel Air went up for $87.8million at auction this week. But the highest bid came in at just under $45.8 million, according to the home’s seller, dermatologist-turned-developer Alex Khadavi.
“Horrible, Horrible, Horrible!” This is how Khadavi described the auction results to CNBC. He filed for Chapter 11 bankruptcy protection two weeks after putting the home on the market last year.
Despite flashy amenities such as a stealthy DJ booth that hydraulically rises from the lounge floor, a black marble-covered car gallery, and a glass and marble bridge suspended above the lobby, the sale auction for the property in the luxury district of Los Angeles failed to reach the $50 million reserve, the lowest amount Khadavi would accept.
“Nobody told me this thing was going to go below, below that level,” he said.
Dr. Khadavi sits atop the DJ booth that rises below the floor of his special home in Bel Air.
Khadavi – who owes tens of millions of dollars to several creditors, according to court documents – had hoped the auction would precipitate a sale price high enough to cover his debt. But the doctor told CNBC he was not happy the auction, which ended Monday night, coincided with sharp declines in stocks and crypto.
Khadavi also said he believed his agreement with the auctioneer, Concierge Auctions, prevented the company from launching the auctions below the reserve price. So when the five-day auction opened, he was shocked to see the auction house start bidding $10 million below the lowest price he had agreed to consider. The seller believes this lower than expected starting point set the stage for what happened next.
Bidding was slow, and on the final day of the auction, the highest bid was accepted, and it fell about $4.2 million from the reserve. The last bid of $46.8 million before the auction closed was not realized.
A screenshot of the auction results from Khadavi’s cell phone.
Concierge Auctions has not commented on Khadavi’s confusion as to why bidding started below his reserve. The auctioneer would not reveal how many bidders actually bid in the auction. But company president Chad Roffers made this statement via email:
“After a spirited auction, the bidding is closed and the highest bid is in the trustee’s hands. With over 80 qualified screenings in the past 60 days, we are confident that market value has been delivered. ”
A glass and marble walkway overlooks the living room and leads to the owner’s wing.
Marc & Tiffany Angeles / Aaron Kirman Group
Generally, a seller is not required to accept an offer below the reserve price, but the auction of the Khadavi property, located at 777 Sarbonne Road, is a little more complicated because it is part of bankruptcy proceedings. Khadavi told CNBC that in early June, the highest existing bid on the home will go to court and if approved, the sale will go ahead whether she likes it or not.
Khadavi is now in a race to find a bid that tops the best bid delivered at the auction and he said he is considering legal action against the auctioneer over what he called a ‘flawed’ bid .
“Honestly, I’m not happy,” said co-listing agent Aaron Kirman of Compass. “We wanted more.”
But Kirman said he doesn’t believe the auction was wrong. “At the end of the day, the highest bidder is the highest,” said the agent, who has participated in several luxury real estate auctions.
A price drop of almost 50% is not unusual for high-end properties that sit on the market for an extended period before finally going up for auction. Based on CNBC’s review of recent ultra-luxury auctions, the top four mansions ever auctioned have had their original asking prices reduced by 68% or more.
The Bel Air deal will include a court-approved 5% auction fee, which will be paid by the buyer, according to the auctioneer’s website. That would bring the property’s current offering to just over $48 million. If the sale is approved by the court, the mansion would be the fourth most expensive house ever sold at auction.
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