Currently listed for $160 million, the estate is the country’s priciest property and will be the most expensive property in the U.S. to ever hit the auction block.
Concierge Auctions is reportedly going to run the bidding this month. The auction will be conducted without a minimum bid or reserve price, according to the Real Deal. At this writing, the listing hasn’t surfaced on the Concierge Auctions website.
Owned by billionaire Steven Udvar-Hazy, the property is also represented for sale by Jeff Hyland of Hilton & Hyland. The $160 million price tag is still in effect in case a buyer wants to pre-empt the bidding process.
But is an auction a smart strategy for such a property? We took a closer look at the place and asked agents familiar with the California luxury market for their takes.
A brief history of the home
Constructed over seven years and completed in 1998, the property is a re-creation of an Italian village and encompasses 9 acres, including the 20,000-square-foot main residence. It came on the market two years ago for $165 million. The price came down this June to $160 million—a paltry 3% reduction.
Villa Firenze details
The property is the largest assemblage of land in the ultraexclusive enclave of Beverly Park.
Accessed via its own street, the gated compound includes a 30-car courtyard surrounded by 40-foot-tall palms.
The one-of-a-kind setting was designed to evoke Europe. The main villa, done by William Hablinski Architecture, features 20 bedrooms and 23 bathrooms.
The interior boasts “every possible amenity,” including high ceilings, large formal gathering spaces, and arched doorways. Details include a wine cellar, formal dining and living rooms, a family room, library, gym, home theater, media room, and den. The kitchen comes with a breakfast area and a pantry. The many bedrooms and baths include a master retreat as well as staff quarters and guest accommodations.
Outside, the landscaped grounds boast a backyard with pool and pool house, two-story guesthouse, tennis court, and walking/jogging trail. A separate lot comes with room for additional development—ideal for these pandemic times and the need for space to spread out.
The community of Beverly Park is a huge draw in and of itself and has been home to A-listers such as Denzel Washington, Eddie Murphy, and Sylvester Stallone.
To auction or not to auction?
So, is an auction a good way to go for such a prominent property? That depends on what the seller is after.
“Going to auction could be a great strategy if they are looking to sell the property quickly,” says Shelton Wilder, CEO of the Shelton Wilder Group with Compass.
And for a property that’s languished on the market, an auction can galvanize a buyer.
“Sometimes these $50 million to $100 million estates sit on the market and take two to five years to sell,” adds Wilder. “This strategy to go to auction will reach more people and could drive a lot of interest and demand in the property.”
She also notes the size and scale of the estate present challenges in terms of pricing. “These properties are so unique that there may be no comparable properties exactly like the subject property to base the price off of.”
Another downside: There might not be a pool of bidders.
“One thing to note is that it takes a very open-minded seller to welcome this strategy. If there is a reserve number in place that’s not met during the auction, it will negatively affect a buyer’s perception of the property value far more than if the property was to simply sit on the market for an extended period of time,” says Michelle Schwartz with The Agency.
Also, if the goal is getting that aspirational $160 million price tag, an auction likely won’t get you there.
“I don’t believe this is good for the sellers; they will not get top dollar,” says Rochelle Maize, executive director of the luxury estates division at Nourmand & Associates. “It is more like a fire sale. It puts a desperate, negative spin on the property. In the past, auctions have not worked in selling ultrahigh-end properties and have been fraught with lawsuits. The seller would be much better off realigning the property to the real market value and creating a new marketing strategy.”
Guesstimates on final auction price
We asked a handful of local agents for their best guesses on the final price when the bidding is said and done.
Schwartz, of The Agency: “It will sell for between $80 million and $90 million, as the type of buyer who is drawn to this process is typically looking for an amazing deal. [They’re] not necessarily coming in with the emotional connection that typically drives asking price.”
Maize, of Nourmand & Associates: “The highest sale price per square foot received behind the gate [of Beverly Park] has been roughly $3,500 per square foot. With 28,000 square feet of living space, the valuation is around $98 million. Add in a private street and over 9 acres … you’re looking somewhere around $110 million. I believe if it’s sold at auction, it will sell below $100 million—probably around $75 million.”
Arvin Haddad with The Agency and CNBC’s “Listing Impossible”: “This presents an opportunity for buyers who have enough cash to parlay on an exotic adventure. Anything under $75 million would be a steal.”
Wilder, of the Shelton Wilder Group with Compass: “Although this estate is currently listed at $160 million, I think it will sell closer to $100 million less than that, around $65 million.”
Kofi Nartey, founder and CEO of Society Real Estate + Development: “It will trade between $40 [million] and $55 million. This is more in alignment with the current environment and aligns with the mentality of the auction buyer seeking a deal.”