It’s been a long and winding road for +Art, the 189-unit Chelsea condominium building that launched sales during the darkest days of the financial crisis in 2008. Sponsor Ekstein Development and broker Halstead Property Development Marketing opted to take the units off the market later that year because of a lack of demand for pre-construction condos and when sales finally restarted in 2010, they did not rebound with gusto.
Now, with only 25 units remaining, Ekstein has changed course. The developer has sold 18 of the building’s units to an international investment firm, which is temporarily converting the units to rentals. Public records show the investment firm, GreenOak, paid approximately $17 million for the 18 units. While records did not indicate his involvement in the buying entity, sources told The Real Deal that Ekstein maintained a stake in the apartments in the deal. Neither Ekstein nor GreekOak were immediately available for comment.
There are now only seven remaining sponsors units for sale in the building, which is located at 540 West 28th Street, between 10th and 11th avenues, sources said. Those units are being marketed by Prudential Douglas Elliman as of three weeks ago. The remaining one- and two-bedroom units are some of the largest and well-placed in the building and are priced up to $2.15 million. Halstead’s involvement with the project has ended.
“[Ekstein] decided that they weren’t getting the price per square foot that they wanted so instead of just selling them to everybody and anybody, he found another business partner that wanted to buy a bunch of units,” one source told The Real Deal. “He wasn’t going to just give his units away.”
On an individual basis, the units sold for much less than their asking prices. For instance, a 729-square-foot one-bedroom apartment on the seventh floor sold to GreenOak for $809,190; it was most recently listed for $980,000. A 1,161-square-foot two-bedroom sold for $963,630 after having been listed for $1.53 million.
The source said the new partnership is planning to rent the units for a few years and bring them back to the market once demand for mid-range apartments improves. “It’s an investment choice,” the person said. “It’s a smart move on [Ekstein's] part.”
Stephen Kliegerman, the head of Halstead Property Development Marketing, disputed claims that sales had been slow at the project. “Sales were actually very good,” he said. “It was just the right deal at the right time.”
Of the developer’s decision to switch to a new marketing team for the remaining units, Kliegerman added: “The developer didn’t want to spend money to keep operating a sales office and so they [chose] to almost treat [the remaining units] like re-sales. They chose to work with a different broker, which was fine with us.”
GreenOak, which has offices in Asia, Europe and North America, is not new to the Chelsea market. Earlier this year, the company partnered with Atlas Capital Group to buy the defaulted note on a recently developed office property at 218 West 18th Street, previously owned by embattled developer Harry Jeremias.