On the market for $165 million in 2017, the grand estate sold at auction in April for $51 million. While substantially lower than the original asking price, the auction did set records.
Jeff Hyland with Hilton & Hyland represented the seller, who is reported to be billionaire Steven Udvar-Házy. The buyer was repped by Richard Klug of Sotheby’s International Realty.
As we’ve previously reported, when the megamansion landed on the market in 2017, it was the nation’s most expensive home. In 2020, it was relisted for $160 million, a slight concession on the original price. Even with the small discount, the property still ranked as the most expensive listing in the country.
But with no sale on the horizon via the traditional route, the seller sought the finality of an auction. Earlier this year, the mansion became the priciest property in the United States ever to hit the auction block.
Bidding was handled by Concierge Auctions and the process ran from Jan. 26 through Feb. 2. With no reserve price set, the highest bid at close acquired the prestigious property.
After the gavel fell, the closing price set set a new record for the auction house, which is used to setting and breaking real estate auction sales records.
“Villa Firenze in Beverly Hills is the most expensive house ever sold at auction, and a fourth consecutive world record for Concierge Auctions,” says Laura Brady, the co-founder and CEO of Concierge Auctions.
For a property with no obvious comparables, an auction serves to unlock a home’s true value.
“The Concierge Auctions model identifies buyers and creates competition, which identifies value. We accomplish our sellers’ goals of speed and control, while delivering liquidity at a market-driven price,” added Brady.
So what did the winner acquire?
Little Italy in 90210
With over 9 acres across three lots, the Italianate village was billed as “the largest assemblage in North Beverly Park.”
Located in “the most exclusive guard-gated community in Los Angeles,” it is accessed by its own private street. The gated estate opens to an immense courtyard with space for 30 cars, surrounded by lush, 40-foot-tall Canary Island palms.
The one-of-a-kind setting was designed to evoke Europe. The main villa, built in 1998 by William Hablinski Architecture, features 20 bedrooms and 23 bathrooms, with a total of 20,000 square feet in the main house. There’s also a two-story guesthouse.
Inside, the mansion boasts “every possible amenity,” including high ceilings, large formal gathering spaces, and arched doorways. It includes a wine cellar, formal dining and living rooms, a family room, library, gym, home theater, media room, and den.
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The kitchen comes with a breakfast area and a pantry. The many bedrooms and bathrooms include a master retreat, as well as staff quarters and guest accommodations.
Outside, the landscaped grounds boast a backyard with pool and poolhouse, a two-story guesthouse, tennis court, and jogging trail. A separate lot comes with room for additional development, perfect for those who are hoping to continue to focus on life around the home site after the pandemic.
This place could be an escape without leaving home, with resort features, plenty of space to divvy up office and personal living space, and an easy way to entertain crowds both outside or indoors.
Opining on auctions
While the public-facing information seems to suggest a huge discount off the list price, the buyer actually paid significantly more, according to Anthony Marguleas of Amalfi Estates.
First there’s the buyer’s premium, the charge that the winning bidder pays above the gavel price. The premium covers marketing costs, according to the Concierge Auction site. In this case, add another $5.1 million to the $51 million bid (minus any buyer incentive discount, if any came with this auction).
Marguleas also notes that the buyer agreed to buy some of the personal property and fixtures in the new digs. After all, 20,000 square feet of luxe living space requires a lot of decor. He says those inclusions brought the final price “closer to $60 million.”
So was the auction still the best way to go?
“The reality is that was on the market for four years,” Marguleas says.
With the help of the auction deadline, he says, “It got it sold. Did they leave money on the table? Who knows? It speeds up the process. It’s an option people use to get a little more activity and excitement.”
Prior to the bidding, we fell prey to the excitement and asked luxury real estate agents to weigh in with estimates for how much the estate would sell for. Kofi Nartey, CEO of Globl RED came closest to the mark. In December, he told us, “It will trade between $40 [million] and $55 million.”
Turns out, Nartey is a property prognosticator without parallel. We asked if he played the lottery that day. Instead, he simply told us how he arrived at that amount.
“The auction path is effective in bringing exposure and urgency to listings that are often hard to price, due to their unique nature,” Nartey says. “The word auction even evokes a sense of opportunity and excitement in consumers. Sellers just have to be ready to accept much less than what the home would typically list for. The auction may not capture the full market value—but it can help expedite the sale of select ultraluxury properties.”
It’s difficult to predict where a sale will settle. Rochelle Maize, executive director of luxury estates division at Nourmand & Associates, thought the auction might bring in somewhere around a $75 million sale when we asked her late last year. When we spoke with her recently, she said she believes the buyer scored a deal.
“The seller would have achieved a much higher selling price had he realigned the property and marketing plan more strategically,” she said. “Auction sales always come with the risk that the highest bid might not meet the sellers’ expectations. It would have been more strategic if the sellers had aligned the property to a realistic price structure and instituted a newer, younger, creative marketing plan.”
She said she would advise against an auction for this particular kind of property.
“I believe that auctions do not work well for the ultra-high-end luxury marketplace,” she said.
She added, “An auction can get the word out to a new buyer pool by creating a high sense of urgency around the sale. However, in the high-end luxury market, the real potential buyer pool is small, and the actual buyers are much more educated and savvier.”