Lexin Planning 270-Unit Conversion in Chelsea

Where Metin Negrin once saw a sales opportunity, he’s instead embracing the office-to-residential conversion trend.

Lexin Capital filed plans to convert 229 West 28th Street in Chelsea from office and retail use to apartments, the Commercial Observer reported. It’s not immediately clear if the units will be rentals or condos.

The conversion plans call for the 12-story, 157,000-square-foot building to expand to a 35-story, 207,000-square-foot residential complex. Most of the space would be residential, though there would also be 3,900 square feet of commercial space; the Department of Buildings application references “general wiring for a nightclub” on the ground floor.

The conversion plans were first reported by PincusCo. In comments to the Observer, Negrin said the project “shows the adaptability of this great property,” mentioning how it started as a printing factory a century ago.

Negrin’s excitement for the conversion is a departure from a few years ago, when the Lexin owner and president appeared ready to wash his hands of the property.

Lexin bought the property on West 28th Street, dubbed the Caxton Building, in 2014 for $81.5 million and refinanced it in 2016 with a $73 million loan from Aareal Bank. Lexin put the property up for sale in February 2020, at which time it was 90 percent leased, aiming for a price around $138 million.

He never sold the property, though, and leasing activity collapsed as the pandemic’s impact raged across the office landscape. In 2022, Lexin reached maturity default on the property’s non-performing loan, a $65 million debt an Aareal subsidiary put up for sale in 2023, when the property was only 58 percent leased.

Months later, a buyer emerged for the debt: Lexin itself, putting it in control of the building’s future once more. That future doesn’t appear to include existing office tenants, including health tech company Noom and wedding photographer Edward Dye.

Elsewhere, Lexin put the development site at 75 Nassau Street up for sale last summer, seeking a valuation of around $75 million in either an outright sale or stake sale for one of the last 421a-eligible development sites in Manhattan.

The site — zoned for mixed-use residential and commercial and eligible to be developed into a rental or condo building with 253 units — has yet to be sold.

— Holden Walter-Warner