A top modern mansion in Bel Air was listed for $87.8 million at an auction this week. But the highest bid was just under $45.8 million, according to the home’s seller, dermatologist Alex Khadavi.
“Terrible, Terrible, Terrible!” 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 like a stealthy DJ booth that juts out from the living room floor hydraulically, a car showroom clad in black marble and a glass and marble bridge suspended over the foyer, A property auction in the posh Los Angeles neighborhood failed to meet a reserve of $50 million, the lowest amount Khadavi would entertain.
“Nobody told me this was going to go below, below this,” he said.
Dr. Khadavi sits atop the DJ booth that rises from below the floor at his distinctive Bel Air home.
According to court documents, Khadavi – who owes tens of millions of dollars to several creditors – had hoped the auction would fetch a large enough sale price to cover his debt. But the doctor told CNBC he was not pleased that the auction ended Monday night, which coincided with a massive drop in both stocks and cryptocurrencies.
Khadavi also said he believes his deal with auction house Concierge Auctions makes it impossible for the company to start bidding at the reserve price. So when the five-day auction opened, he was shocked to see the auction house begin to bid $10 million less than the lowest price he had agreed to consider. Sellers believe that a lower-than-expected starting point sets the stage for what happens next.
Bidding was slow to arrive, and on the last day of the auction, the highest bid was accepted, and it was about $4.2 million short of reserves. The final offer of $46.8 million before the auction closed was not reached.
Screenshot of auction results from Khadavi’s mobile phone.
Concierge Auctions had no comment on Khadavi’s confusion as to why bids were starting to fall below his reserve. The auctioneer will not disclose how many bidders actually bid in the auction. But the company’s president, Chad Roffers, issued this statement via email:
“After a heated auction, the bidding is over and the high bid is in the hands of the Trustee. With over 80 qualifying screenings in the last 60 days, we’re confident the market value is worth it.” has been distributed.”
A glass and marble bridge overlooks the living room and leads to the owner’s wing.
Marc & Tiffany Angeles / Aaron Kirman Group
Normally, sellers are not required to accept a lower bid, but Khadavi’s property auction, located at 777 Sarbonne Road, is a bit more complicated as it is part of bankruptcy proceedings. . Khadavi told CNBC that in early June, the highest available offer for the home will be reviewed by the court, and if it is approved, the sale will proceed whether he likes it or not.
Khadavi is currently in the race to find an offer that exceeds the highest price delivered in the auction and he said he is considering legal action against the auctioneer for what he calls a “flawed” auction.
“Honestly, I’m not satisfied,” said Aaron Kirman of Compass, the co-listing representative. “We want more.”
But Kirman says he doesn’t believe the auction was flawed. “At the end of the day, the highest bidder is the highest bidder,” said the agent, who has participated in several luxury real estate auctions.
A price drop of nearly 50% is not unusual for luxury properties that sit on the market for a long time before finally being put up for auction. Based on CNBC’s review of recent ultra-luxury auctions, The top four homes ever sold at auction saw their initial asking prices drop by 68% or more.
According to the auction house’s website, the Bel Air deal will include a 5% court-approved auction fee that will be payable by the buyer. That would bring the property’s current offer to just over $48 million. If the sale is approved by the court, the mansion will be the fourth most expensive home ever sold at auction.