All this $500 million "house" needs is a buyer
Although media reports have called the $500 million property that real estate investor and film producer Nile Niami is developing a "home," that doesn't really do it justice.
While it does have a 74,000-square-foot main residence, it also includes three smaller residences on the four-acre property in Los Angeles' exclusive Bel Air neighborhood. The property features sweeping views of the Pacific Ocean along with 5,000-square foot master bedroom, a "Monaco-style casino" and four swimming pools. Bloomberg News, which first reported this story, calls it "one of the biggest homes in U.S. history."
In an interview with CBSMoneyWatch, Niami argued that the asking price on a square-foot basis is competitive with smaller luxury homes in the area. He purchased the hilltop property two years ago and doesn't have a buyer lined up yet, though "we do have a couple of people who have been circling," he said.
He added that he thinks the Southern California real estate market is undervalued. "There is a demand," he said, "These guys need the space for their staff."
As Gawker noted, the property has almost twice the square footage of the White House and is 100 times the size of the average Brooklyn apartment. Jonathan Miller, president of appraiser Miller Samuel, told Bloomberg that he broke out laughing when he heard Niami's asking price.
"I am skeptical," he told the news service. "But we're in this perpetual state of surprise as new thresholds are broken."
It's more than double the second-highest priced property on the market, the $195 million Beverly Hill estate being offered by billionaire real estate investor Jeff Greene.
Niami's timing could be auspicious. The luxury real estate market is hot, with prices in 33 cities now about 33 percent higher than they were in 2009, more than doubling the 14 percent increase seen in the rest of the market.
Although a $500 million home may strike some as overly pricey, it might be a good investment for someone who lives outside the U.S. and is looking for a safe haven for their cash, according to Milton Pedrazza, the head of the Luxury Institute, which analyzes the spending habits of the well-to-do. He figures about 1,000 people in the world can afford Niami's property and probably 10 of them would be willing to write the big check needed to buy it.
"Stocks are overvalued by any measure. Bonds aren't yielding much," he told CBS MoneyWatch. "Real estate is an asset that may lose value, but the downside to it is limited."
In a nod to California's severe drought and other environmental problems, Niami noted that the lush green grass on the property will be artificial and that he'll use energy-efficient LED lighting.