Auction set for 21 units at troubled Oosten condo
Chinese developer defaulted on loan at $372M Williamsburg project
A block of 21 unsold units in the beleaguered Oosten condominium is up for grabs, with some strings attached.
The ownership stake controlling the luxury apartments is set to be auctioned off July 25 in a UCC foreclosure after the Williamsburg project’s Chinese developer defaulted on a $45 million loan. But a beef with the condominium board might divert some proceeds of the sale.
Sale proceeds from the 21 units would be enough to cover the $36 million that XIN Development Management East’s ownership entity owed on the loan as of June 5, according to court documents filed by its attorney, Richard Shore of Nixon Peabody. Shore did not return requests for comment.
The loan was made by an Israeli lender and sold in November 2022 to First Realty Capital Holdings, which is pursuing the UCC foreclosure. Its attorney, Avery Mehlman at Herrick Feinstein, declined to comment. Greg Corbin of North Point is handling the auction.
The 216-unit Oosten was the first U.S. building designed by acclaimed Dutch architect Piet Boon and was developed on the Williamsburg waterfront in 2015 by XIN, the U.S. arm of Xinyuan Real Estate.
Its projected sellout of $372 million made it among the most expensive Brooklyn condominiums of the era. A full-block project at 429 Kent Avenue, it features an interior garden, roof deck and spa.
Missteps have long plagued the project, although it now appears to be 90 percent sold.
Xinyuan bought the site for $54 million in 2012 and tapped Halstead Property Development Marketing the following year to handle sales. Two years later, in 2015, Xinyuan filed a $10 million claim against the project’s designer, Wank Adams Slavin Associates.
A former general contractor, Wonder Works Construction, sued Xinyuan in 2017 for $20 million, alleging it was improperly terminated. One dissatisfied buyer also sued the Chinese firm.
Concerned about what was going on in New York, in December 2017, Xinyuan handed management of its local projects to Xin Fu Development, a joint venture with Kuafu Properties.
After Kuafu affiliate Silk Realty Group took over sales and marketing, Halstead sued in 2018, alleging the developer owed it nearly $1.3 million. That case was settled in 2020 and the Wonder Works suit was settled last year.
The Oosten’s legal troubles have continued, however, with the condo board accusing the board of construction defects and not paying common charges, among other failings.
The board’s attorney, Jeffrey Metz, a partner at Adam Leitman Bailey’s firm, has now asked the Appellate Division for a temporary restraining order to ensure proceeds of any sale are put into escrow to satisfy claims by the condo board, which has sued to collect on a previous settlement.
Claims of shoddy construction and numerous leaks were settled with the developer in June 2022, when XIN agreed to transfer to the board a unit worth $944,000 by the end of last month to house an on-site resident manager. The board was also to receive five handicapped parking spaces worth $325,000.