This Beverly Hills mansion auction was set for April. What could go wrong?

Developer Stuart Rubin was facing foreclosure on a luxury hotel project and several lawsuits when he decided to sell his 13K sf home during a pandemic

TRD LOS ANGELES /
Jul.July 02, 2020 11:00 AM
The Beverly Hills mansion (Credit: Google Maps)
The Beverly Hills mansion (Credit: Google Maps)

UPDATED, July 19, 2:22 p.m.: Facing foreclosure on his Coachella Valley luxury hotel project and several lawsuits, including one for failing to make payments on his Bentley, Stuart Rubin decided to auction off his Beverly Hills mansion.

But the CEO of RP Realty Partners real estate investment firm had several obstacles to overcome. The Los Angeles luxury market was frozen from coronavirus crisis lockdowns and estates in that ZIP code are rarely sold via auction. Rubin’s choice of companies to handle the April 24 event, Concierge Auctions, was also curious. The luxury auction house is contending with lawsuits of its own over allegations it used fake bidders to boost prices.

Unsurprisingly, what followed have been conflicting accounts over whether the auction ever took place for Rubin’s 13,000-square-foot home on North Alpine Drive and who is to blame for the failed sale. What’s clear is that the mansion — once listed at $20 million — is now off the market and unsold. Rubin’s broker, Coldwell Banker’s Joyce Rey, recently marketed it for sale on her Instagram page, another potential problem given the National Association of Realtors’ new rule against so-called pocket listings.

The unusual case highlights why auctions tend not to work in an already hard-to-predict luxury market whose uncertainty has been heightened by Covid-19.

For Rubin, the decision to sell is set against a difficult period in his quest to build a luxury hotel.

The Coachella project

Rubin and entertainment lawyer Gary Stiffelman announced in 2018 a planned $45 million luxury hotel near the site of the Coachella music festival. The Hotel Indigo-branded project would feature a 10,000-square-foot saltwater pool, catwalk, and 11-acre “grassy playground” to host concerts and wellness retreats.

But in December, lenders Calmwater Capital and U.S. Real Estate Credit Holdings moved to foreclose on the project site. Then in January, Stiffleman sued Rubin, accusing him of “incompetence and fraud,” according to the lawsuit.

Stiffelman and the lenders are not the only parties to sue Rubin. The developer faces complaints by hotel project contractors Silhouette Outdoor Furniture and Doug Wall Construction for purported payment defaults.

Bentley Financial Services has also sued Rubin for allegedly not making good on his $2,100 monthly payments for his Bentley Bentayga V8, which retails for about $160,000.

Facing these complaints, Rubin in March decided to auction “without reserve,” his Beverly Hills estate, giving notice on the Multiple Listing Service. The move surprised luxury real estate brokers.

“This is not an area for auctions,” said Stephen Shapiro, co-founder and chairman of Westside Estate Agency, who said that almost every sale in wealthy west L.A. was done through private negotiation.

But Coldwell’s Joyce Rey voiced optimism about the upcoming event, which was scheduled for April 24.

Austin, Texas-based Concierge Auctions was hired to manage the bidding, and it assembled “a large database of motivated buyers,” Rey said at the time, including those “living in a condo, who say they want to be living in a house.”

The hammer fell or did it?

Days later, Rey told The Real Deal that the auction was completed and the house sold. The winning bidder’s name and price were confidentially sent to Los Angeles County Superior Court, she said. On April 29, the MLS listed a sale on the mansion as “pending.” That changed to “relisted” on May 18, then “delisted” on June 16.

This week, Rey posted a photo of the property on Instagram, with a caption that read in part: “Stunning and extremely private Mediterranean villa. 715 N Alpine Drive. Contact me for more info or to set up a private showing!”

Asked about the Instagram post, Rey said through a Coldwell spokesperson that the auction never materialized. A Coldwell spokesperson later blamed Concierge Auctions for the mixup.

“There never was a pending sale because the family declined to proceed with Concierge Auction and terminated their relationship with the organization,” the spokesperson texted. “Unfortunately, Joyce Rey was given incorrect information by Concierge Auction.”

But a Concierge Auctions spokesperson disagreed, saying a sale did take place, but a court didn’t approve the result. There was no explanation about why. The auction house has faced scrutiny before, including lawsuits by sellers claiming it uses fake bidders to inflate prices on luxury homes.

The company’s well-publicized April 2019 planned auction of an 80-acre coastal estate in Cambria that had been listed for $65 million was canceled.

Messages left with Rubin have not been returned. His attorney, Laurence Berman, declined comment on the specifics of the failed auction.

Correction: A previous version of this article included an incorrect photo. The image was misidentified as the mansion’s owner, Stuart Rubin. It was a photo of his former business partner, Gary Stiffelman, who is suing Rubin.


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