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Why The $125 Million Versace Mansion Will Find A Buyer

In 1997 the world gasped as Gianni Versace was shot to death on the doorstep of his Miami Beach mansion by a serial killer whose face had been gracing America’s Most Wanted for several weeks. After the tragic shooting, the house, now notorious, sat empty until 2000 when an entrepreneur named Peter Loftin bought it. The new owner restored the 23,400-square foot home, conserving the fashion designer’s touches and converting the space into a high-end boutique hotel.

Less than a week ago, Loftin listed the storied estate for sale. The price: an astounding $125 million. It is now one of the two most expensive homes for sale in the U.S. (the other being L.A.’s $125 million Fleur de Lys estate). And at that nine-figure price tag, it’s worth as much as a bailout for Spain’s troubled banks.

Yet the trophy property, available as either a single-family home or as a hotel, will sell — and might even do so relatively fast. “An incredible amount of activity has happened since we listed it on Friday,” says Jill Hertzberg, a luxury broker with Coldwell Banker Previews International and one half of the Miami real estate duo known as The Jills. “We’ve already received about 15 calls from serious potential buyers and investors.”

The property, called Casa Casuarina, is quite the trophy property. In addition to its tragic modern-day history, it sits in a prime location: waterfront on Ocean Drive in bustling Miami Beach, behind gates. The manse has 10 bedrooms,11 bathrooms and an observatory, all finished with hand-painted walls and fresco-adorned ceilings. Hertzberg says Versace designed every room with a different fantastical theme. It also has an entryway flanked by twin sweeping staircases that have since been replicated in newer projects like England’s Updown Court. Even so, the compound’s most famous amenity isn’t actually inside the house: it’s an opulent 54 foot-long pool decorated in mosaic tiling and lined with 24 karat gold, located off the private courtyard outside.

Casa Casuarina was built in 1930 by architect Alden Freeman, a well-known architect and philanthropist of the time. The design was inspired by the Alcazar de Colon, the colonial palace where the family of Christopher Columbus once lived. Versace bought Casa Casuarina in 1992 and spent a reported $33 million on improvements that included a south wing expansion and the golden pool.

“He [Versace] made a modern-day Italian villa in the middle of South Beach with unobstructed ocean views,” gushes Hertzberg, whose team exclusively represents the seller. She says the price tag was determined according to its uniqueness, as few comparables exist. ”This is like a piece of art where it has an intrinsic value that someone will recognize. You have to bring it out and see who in the world wants something like this,” she adds.

Indeed Loftin decided to list Casa Casuarina now for the same reason many celebrated properties in other parts of the country are debuting on Multiple Listings Services right now: the world’s billionaires are buying. For example, in New York City casino magnate Steve Wynn recently snatched up the Ritz Carlton penthouse for $70 million and another anonymous billionaire family went into contract last month on a $90 million-plus penthouse in the One57 development. Hedge fund titan John Paulson recently spent $49 million on Hala Ranch in Aspen.

Miami alone has welcomed nearly a dozen eight-figure home sales over the past six months alone. Among the biggest: Sears chairman Eddie Lampert’s $40 million Indian Creek purchase (currently a county record); an anonymous Italian buyer’s purchase of a Continuum penthouse for $25 million (a county record); and now, the reported pending sale of another Indian Creek compound that had been asking $52 million. (The Jills represent that listing but decline to comment on or confirm the sale.)

In general Miami’s luxury real estate market has enjoyed a flurry of buyer activity since the beginning of 2011. The Elliman Report, a quarterly home sales report compiled by Miller Samuel and Douglas Elliman Florida, found that the median sales price for luxury single-family homes in the first quarter were 4.4% higher year-over-year and the number of days on market had decreased more than 10%.

With so many buyer calls flooding The Jills office this week, the question of whether the former Versace Mansion can actually fetch $125 million or close to it looms. The last two U.S. residences with nine-figure price tags ultimately sold for less than $100 million.

“We’re definitely trying to do it,” asserts Hertzberg. “Time will tell, but we have certainly been surprised by the interest so far.”

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