Vlad Doronin’s $135M penthouse and the stories developers tell

In 2018, Vlad Doronin was among the developers vying to close New York City’s priciest residential sale. 

Rumor had spread that an Asian investor had agreed to pay $180 million for the pinnacle penthouse at his luxury condo conversion at the Crown Building, putting him firmly in the running for the top deal. 

Doronin confirmed the speculation to the Wall Street Journal the following year and said he was eyeing another unit at the building, known as the Aman New York, asking around $84 million.

But the long-anticipated deal looked a little different than expected when it finally hit the city register last week. Public records show the five-story spread traded not to an Asian investor, but to Doronin himself, and for $135 million — a price significantly lower than the storied contract, though enough to count as the most expensive to close this year.

“An earlier reported offer for the Penthouse was for a fully built-out unit, however this sale represents an unfinished ‘raw’ unit which accounts for the difference in price,” a spokesperson for Doronin’s firm, OKO Group, wrote in a statement. 

Doronin isn’t the only developer to scoop up an apartment or two at his own project, nor is he the first to back an attention-grabbing narrative about a building to drum up interest with the finish line in mind. (To Doronin’s credit, the spokesperson said all units at the building were spoken for. Some have sold for more than $50 million.) 

Developers have been known to float exorbitant listing prices for a headline or exaggerate the square footage in their offering plans.

Extell Development’s Gary Barnett in 2023 copped to overpricing the penthouse at Central Park Tower, once asking $250 million, to score a round of publicity and industry gossip. He dropped the price to $195 million in November in an attempt to “get serious” about finding a buyer. 

Other developers have publicly overstated the numbers on a project’s sellout progress. The chief example is the Trump Organization, which has often overstated sales figures or understated its ownership stake in a project.  

In 2018, an investigation by ProPublica found that during the mid-2000s, members of the Trump family, working as executives with the Trump Organization, inflated sales numbers at at least seven different developments across the U.S. Canada, Panama and the Dominican Republic.

If aspirational pricing is one end of the spectrum, the other crosses into a rocky territory, where misstatements can draw scrutiny from potential plaintiffs and regulators.

“There’s a very fine line between puffery and fraud,” said attorney Massimo D’Angelo, adding that cases of the latter require a high level of detail proving the offending party caused damage by intentionally misrepresenting the facts.

It’s a line the former president toed with his 46-story lower Manhattan development, Trump Soho. In 2010, buyers sued Trump and others involved in the project, alleging they exaggerated the velocity of sales at the development, despite its financial troubles.

The lawsuit claimed that while his children, Ivanka and Donald Jr., claimed more than 50 percent of the units had been sold, data filed with government agencies indicated progress was between just 15 to 30 percent at the time. 

The suit prompted a probe into the accusations by the Manhattan district attorney, according to the Times, though the criminal case was eventually closed. Trump agreed to refund buyers’ deposits to settle the case in 2011. The project later went bankrupt and dropped Trump’s name. It’s now called the Dominick. 

But inflating sales velocity remains a rare occurrence in New York, where developers are required to file with the Attorney General once the project is declared effective, said attorney Shaun Pappas. 

“[Developers] mostly understand that they’re actively selling in a public market and that these types of questions are asked by buyers, brokers, lawyers,” Pappas said. “The cost outweighs the benefit.”

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Developers are usually wary about inflating numbers even before the mandated publishing period, though there’s variation in how these metrics are tracked, Pappas said. In the pre-effective stage, estimations may be based on the number of contracts out that are expected to be signed. Some opt to release units in waves, so initial velocity may appear slower. 

“There’s different nuances to how these things get marketed and translated to buyers,” Pappas said. “But it’s all based on reality. At least, that’s what I’m advising.”