California Estate Valued at $87 Million Sells at Auction

A bankrupt real estate agent’s hilltop mansion, conceived during Southern California’s property boom and once given an estimated value of $87 million, was sold at auction.

The unfinished Italianate villa on 12.5 acres (5.1 hectares) in Newport Beach comes with a man-made lake, horse stables, vineyard, tennis court, 17-car garage and views of the Pacific Ocean and Santa Ana Mountains.

“We have a successful bidder,” Rob Giem, an agent with Sotheby’s International Realty, which had the listing, said in a text message last night.

The highest bid and identity of the winner aren’t being disclosed because the deal is in escrow, Giem said. Last night’s sale was conducted by Irvine, California-based Auction.com after the estate failed to find a buyer on the open market with a $37 million asking price. The minimum bid required for the property to sell at auction wasn’t disclosed.

Originally named Villa del Lago, the estate was conceived by John McMonigle, the No. 1 U.S. sales agent for Coldwell Banker in 2004 and 2005, at a time when Orange County’s real estate market was fueled by wealth from locally based -- and now defunct -- subprime lenders, including Ameriquest Mortgage Co. and New Century Financial Corp. (CYFL)

McMonigle and his investors paid $3.2 million for the land in 2003. Six years later, the property had an expected value of $87 million, according to the Orange County Register, a local newspaper. The estate was first placed on the Multiple Listing Service in May 2010 for $57 million. The asking price dropped to $37 million in January 2011, after OneWest Bank FSB cut off construction funding and as McMonigle tried to avoid bankruptcy.

McMonigle lost the estate, now known as One Pelican Hill Road North, to a group of investors who put $10 million into the project. The property also has a $20 million construction loan held by OneWest, which acquired the debt after the original lender, La Jolla Bank, failed in 2010, according to bankruptcy court documents.

To contact the reporter on this story: John Gittelsohn in Los Angeles at johngitt@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

Source: http://www.bloomberg.com/news/2012-04-27/california-estate-valued-at-87-million-sells-at-auction.html