There’s falling short of an estimate, and then there’s what just happened in Los Angeles. A mountaintop plot of land in Beverly Hills that was listed for $1 billion one year ago has sold for just 0.01 percent of its original asking price. The 157-acre lot—known as The Mountain as it’s perched atop the highest point in the entire 90210 zip code—sold at a foreclosure auction on Tuesday for $100,000. Yikes.
So, what exactly prompted those three zeros to disappear? Reportedly, an exorbitant debt, murky ownership and a lackluster auction attended by only 20 people—and perhaps a tumbleweed—combined to tank the sale price.
The late Herbalife founder Mark Hughes first bought the undeveloped land back in 1997, but the complex real estate saga began in 2004 when the trust Hughes established lent Atlanta investor Charles “Chip” Dickens $45 million to purchase the expansive estate. Thanks to steep interest rates and property fees, Dickens’s debt ballooned to roughly $200 million, and he subsequently transferred the ownership to a company owned by his business partner on the project Victor Franco Noval. The duo eventually listed the land last year, for the astronomical price of $1 billion—10 times higher than any real estate sale in Los Angeles County history.
Unable to nab a buyer and stifled by debt, the pair’s limited liability company—Secured Capital Partners—tried to file for Chapter 11 bankruptcy, but failed. Hence, the Hughes estate forced a foreclosure auction: This way, the estate could either sell the lot and recover its losses or buy it back. The Hughes estate opted for the latter—and with only a handful of auction attendees and no other serious bids, it succeeded.
According to the Wall Street Journal, any other buyer would have had to front the $200 million to repay the debt, on top of the purchase price. But the Hughes Estate simply—and perhaps painfully—swallowed up the $200 million delinquent loan.
Now The Mountain is back in the hands of the Hughes estate and we can’t wait to see whether they love it or list it.
Check out more images and a video of The Mountain below: