The Real Deal New York

Speedy sale of Chelsea buildings spells doom for sex shop

May 23, 2013 03:30PM

Two Chelsea mixed-use buildings have sold for $15.9 million after three months on the market, the New York Observer reported. Located at 205 and 207 Eighth Avenue between 20th and 21st streets, the buildings have 23 apartments and two retail spaces.

There will be renovations to the lobbies and the buildings’ facades. One of the retailers, a sex shop named Rainbow Station, which is now on a month-to-month lease, will be replaced with a more upscale store.

The buyer is a multi-family lifestyle development company based in the Southwest, according to Gabriel Saffioti of Eastern Consolidated, who represented the buyer but declined to disclose its identity.

Nine of the homes are rent-stabilized, two are rent-controlled and the remaining 12 have been renovated and rent at market rates.

“The regulated apartments, which make up almost half of the units, are renting at below market rates, so there is tremendous future financial upside for the buyer,” Eastern Consolidated’s Deborah Gutoff, who along with Paul Nigido represented the seller, told the Observer.

The buildings together measure 21,800 square feet. Each has approximately 8,800 square feet of homes and over 2,000 square feet of retail. [NYO]Zachary Kussin