If you’ve ever felt bad about your student loan balance, or the pesky disconnection notices Pepco keeps sending you (I’ll pay when I feel like it!), or that credit card bill you stopped paying off that’s the reason you never answer a call from an unknown number, well, keep in mind that some deadbeat in New York City recently lost a $51 million condo to foreclosure. Next to that, your debt troubles are a drop in the ocean.
The deadbeat in question is Kolawole Aluko, a Nigerian oil tycoon, and the foreclosure in question is a 6,240 square foot 79th floor penthouse in one of the world’s most expensive luxury towers in the world, One57 in Manhattan. (The uppermost penthouse in the building sold to a hedge funder for over $90 million.) When Aluko bought the condo in 2015, he took out a $35 million mortgage on the place with a Swiss bank, and then almost immediately stopped making payments – word is, he never even paid taxes or maintenance fees on the place. (What would the maintenance fees be for a $50 million apartment? $300K a month? More?) His sudden financial irresponsibility is likely related to being criminally charged with corruption and bribery; allegedly, he bribed the head of Nigeria’s state-owned oil company for contracts, and then laundered his ill-gotten money through buying private jets, yachts, and, ahem, luxury real estate. While Aluko has flipped several Los Angeles properties since being charged (he sold one of his mansions to Gwyneth Paltrow at a steep discount; guess I missed the Goop article about cynically fleecing fugitive plutocrats), he’s apparently happy to just walk away from this place.
The condo sold this week in a foreclosure auction for $36 million, but Aluko hasn’t been seen in months. He’s rumored to be hiding out on his 213-foot yacht, the Galactica Star (we could brainstorm for a month and not come up with a more perfect name for a corrupt oil baron’s yacht than that), which he recently rented to Jay-Z and Beyonce for $900,000 a week. (“Hiding on your 213-foot luxury yacht” is the debt-dodging billionaire equivalent to the regular person’s “never answering your phone during the day.”) The last time he and his yacht were seen was at the “Fyre Festival,” the Ja Rule-fronted epic failure of a music festival that ended with billionaires and models huddled in FEMA tents, and spawned a billion memes dripping with schadenfreude. Honestly, I felt kind of bad for the guy – let’s be serious, no one’s getting any oil contracts without some briefcases of cash changing hands – until I read that he voluntarily attended the Fyre Festival, and now I think they should just throw him in a Dickens-style debtor’s prison where he can sew mattresses and eat porridge.
The craziest part is that this was only the second biggest foreclosure ever. The top spot of all time goes to the U.K.’s Updown Court, a 52,000 square foot, 103 room spread in Surrey. Updown was built on spec (cringe) from the burned-out shell of an old mansion bought for “only” $30 million in 2002, which the developer then transformed into a “neo-Californian” monstrosity with the help of a Scottsdale, AZ architect that Variety described as a “McMansion specialist.” (Probably the harshest thing you could ever call an architect.) After pouring millions upon borrowed millions into the place – the heated marble driveway alone was rumored to have cost $6 million – the developer put it back on the market for $145 million. The global economy promptly crashed, the Irish bank that underwrote the estate was taken over, and the property ended up in the hands of the Irish government. They put it on the market but, surprise surprise, there were no takers, and after almost seven years, they auctioned it off for about half of its original asking price, which is an even worse deal, percentage wise, than the final sale price for the Manhattan oil tycoon condo. One of the most interesting takeaways from all this is that if you assume these auction prices represent the market finding the “true price” of these places, then it looks like rich people pay about a 50% markup just for being rich. Maybe they do deserve a huge tax cut? (Nah.)