It’s very L.A.: Dream big and borrow big.
Byron Allen, a former comedian and television host who’s now an entertainment mogul, is borrowing as much as $82.8 million tied to his Beverly Hills mansion, according to a person with knowledge of the deal.
The financing includes a $39 million loan that’s almost double the $19.9 million Allen paid for the property less than two years ago. There’s also a credit line that will fund construction to drastically increase the size of the nearly 12,000 square-foot (1,115 square-meter) property.
OneMillionDollarPlus, which advises rich people on residential financing, announced the deal last week without naming its client. The firm, founded by Ira Meltzer, worked with an unnamed private bank to arrange the debt, which is based on the property’s future value. The home could be worth $150 million when the expansion is completed in three years, Meltzer estimated in his firm’s statement.
Meltzer declined to comment, as did a spokesman for Allen.
Allen founded Los Angeles-based Entertainment Studios in 1993. His Allen Media Group now owns television stations and cable networks, including the Weather Channel, after embarking on a debt-fueled acquisition spree. Last week he spent $380 million buying seven stations from Gray Television Inc.
In recent years he’s also up snapped up some of the most exclusive properties in America, securing giant mortgages tied to them.
In 2020, it was a chalet in Aspen, Colorado, for $27 million. The prior year, Allen purchased an apartment at 220 Central Park South in Manhattan for $26.75 million—obtaining an $18.7 million mortgage from JPMorgan Chase & Co. And in 2018 it was an oceanfront home in Maui for about $23 million with a $17.25 million mortgage from Northern Trust Corp.
Banks are keen to offer supersized mortgages to their most valuable clients as interest rates remain near record lows. Constellation Brands Inc. Chairman Rob Sands and his wife arranged a $23.1 million loan in March for a Manhattan penthouse from Citigroup. The prior month, hedge fund manager Israel Englander secured a $25.6 million mortgage from Morgan Stanley for an Upper East Side townhouse. The loans have interest rates of 2.125% and 2.15%, respectively.
Still, Beverly Hills has a mixed record when it comes to mega mansions and debt.
Film producer Nile Niami became delinquent on a $82.5 million loan for “The One,” a 100,000-square-foot home he developed. The debt on the property has climbed to $110 million, according to Don Hankey, who advanced the money in 2018 and filed a default notice.
Last year, another one of Niami’s projects, a 20,000 square-foot seven-bedroom mansion in Beverly Hills called Opus—sold for $52 million, down from an initial $100 million asking price.
And not far from Allen’s Beverly Hills home is a mansion that its owner, real estate investor Leonard Ross, has been trying to sell since 2007. The home first listed at $165 million is now available for less than $90 million.
This article was provided by Bloomberg News.