You would think that the ultra high end real estate market has peaked. And you'd be mostly correct to think that. However, a handful of ambitious developers are forging ahead building some of the most expensive and enormous homes in the country. Several of these spec mega mansions are in Los Angeles. These developers are building over the top houses that are monuments to excess and sell for hundreds of millions – the priciest hit the market at $500 million.
One of the developers is Bruce Makowsky, whose spec home is on the market for $188 million. Makowsky first made his fortune selling leather bags on QVC. Raj Kanodia is another Los Angeles developer with a $180 million spec mansion in Bel Air to sell. Kanodia also made his fortune outside of real estate. He's a well known plastic surgeon that specializes in nose jobs. Kim Kardashian is one of his patients. Scott Gillen made the money to build his $85 million spec mansion in Malibu by directing commercials for BMW and Mercedes Benz. Nile Niami, who is building The One, a $500 million house being built in Bel Air and Opus a $68 million house in Beverly Hills, did special effects in the makeup department for low budget horror films.
Niami is a particular kind of character. He is 50 with a deep tan. He recently returned from a celeb-studded fasting retreat where he dropped 11 pounds for his trip to Burning Man. He lives in a 10,000 square foot home with a 1970s-esque black leather bed and a collection of vintage Playboy magazine covers. He has considered pitching his own reality show called "The Mansion Maker." The only thing that stopped him from taking his brand to TV was one of his investors, who threatened to pull his funding if he went on TV. Niami finds the whole spec developing thing so stressful that he's launching a fast casual rolled pizza chain in 2019 to have a second income.
Makowsky is the developer behind the 2014 mansion that devolved into a bidding war between Beyoncé and Jay-Z and Minecraft creator Markus Persson. Persson won the bidding war and bought the house for $70 million. Makowsky sets himself apart from the other brash and bold mega mansion developers in that he's building his $180 spec mansion with no debt.
Kanodia has a loan from the Bank of Internet to build his Bel Air manse. Credit Bank of Los Angeles and an unnamed Canadian investor are funding Niami's $500 million foray.
Spec developers are usually shooting for a return on investment of about 50%, though getting 30% is more common.
Kanodia walks to his $180 million spec mansion every morning from his own mansion across the street. He meditates and lays flowers on a shrine to the Hindu gods Ganesh and Lakshmi. He calls it his insurance policy.
Makowsky's $188 million mega mansion is known as Billionaire. He recently turned down $2 million a month in rent from a Saudi family. Here's a video of the mansion:
All these mega mansions are eclipsed by Niami's The One. It has 20 bedrooms, a room with jellyfish aquariums as walls, and a VIP nightclub. At $500 million, it is nearly five times more expensive than the current Los Angeles record.