A $26.5 million building in one of New York City’s most attractive districts surfaced on NFT marketplace OpenSea this week.
The seven-story building in Manhattan’s Flatiron District has shop space on the ground floor and residences above. Okada & Company, the seller, has been in the commercial real estate sector for nearly 60 years, according to CEO Chris Okada, who spoke with The Defiant on Friday afternoon.
- “It’s blowing up,” he said with a laugh. “I’ve done things that went a little viral but this went, like — I got calls from Norway, people reached out from Korea.”
On Twitter this week, crypto enthusiasts praised the decision, calling it the “future of real estate.”
Grant Gerber, Kaddex’s chief governance officer, remarked, “This is unironically one of the best use cases of NFTs.”
There was no shortage of online enemies, of course.
“Yes. In response to people who thought it was a fraud, Okada wrote, “You get the property after buying the NFT.” “You are welcome to reside in the building.” Yes, it is possible to rent it out. It’s not just a high-resolution jpg.”
Other inquiries were also made. Why would you offer an IRL structure as an NFT? What’s the problem with the usual approach of property acquisition?
“If web3 is going to materialize,” Okada responded, “we need to understand how to combine the blockchain with existing government infrastructure that records property transfers.” The auction is mostly a publicity ploy, aimed at drawing attention to the chasm that exists between the blockchain and New York’s Automated City Register Information System, or ACRIS.
“Due to the nature of real estate sales, the sale of the NFT does not warrant the completion of the real estate transaction, or reflect the transfer of the deed or title,” the OpenSea listing warns potential purchasers.
Instead, Okada called it a “ticket” — or, perhaps more appropriately, a promise — to transfer the property’s deed. The money will be held in escrow “which the buyer’s team still controls” after the NFT is purchased. It will remain there until the usual real estate transfer process is completed and the acquisition is entered into ACRIS.
Okada is a crypto enthusiast who has branded his family-run business as crypto-friendly.
Its website promises, “We have over 40 office buildings in all the popular crypto zip codes!”
The selling, however, is also a lesson in the whims of the cryptocurrency market.
“Right now, there’s a lot of fraud in the NFT space,” he complained. “If you look for Chris Okada on OpenSea, there are already three or four phony profiles…”
It has also brought attention to the cryptocurrency market’s instability. The asking price, 15,000 ETH, was worth around $29.5M when it was first advertised on OpenSea. By Friday afternoon, it had decreased to around $26.3 million, a “crazy” reduction, according to Okada.
The building was purchased for $16.5 million in November 2021 and completely renovated. Okada would consider it a good departure if it sold for $26 million. “If it continues to plummet, we’re going to have a problem,” he added. “We’ll remove the listing right now.”
Nonetheless, Okada is pleased with the reception to the advertisement.
“One of the most good things that came out of this whole experience is that the community is really, really, very enthused about utilities,” he said. “Not just lovely pictures, but meaningful, real-life applications that can make a difference” is the type of functionality that NFTs require.
