Shuttered Harlem hostel closes for $19.5M.
From left: Gilad Azaria and images from 159 West 118th Street
An Israeli investment firm has snapped up 159 West 118th Street, a condominium-turned-hostel that was shuttered by the Department of Buildings in April 2010. The building, known as Lotta Condominiums, was transformed back into a condo following its one-and-a-half-year stint as a youth hostel.
Gaia Real Estate has just purchased the five-story building (including ground-floor retail space) for $19.5 million, according to managing partner Amir Yerushalmi, who said his firm plans to market the building as a mix of condo units and rentals.
Prudential Douglas Elliman's Gilad Azaria handled the listing.
It's the second building that Gaia has purchased on the Upper West Side in the last six months. The other is a 48-unit rent-regulated building at 5 West 91st Street that Gaia purchased from developer Larry Gluck for $16.75 million last September, Yerushalmi said.
Yerushalmi said his company will be finalizing its plans for the building "in the next few weeks," and added that he will likely be selling the units for roughly $650 to $700 per square foot, in accordance with the neighborhood's average selling price.
"We believe a lot in this area," Yerushalmi said.
Despite Gaia's enthusiasm for the building, 159 West 118th Street has struggled on the market.
Seller Gal Sela, an independent investor who bought the building with partner Eli Idi in 2005 for roughly $2 million less than its closing price now, said that he first tried to market the condo units in early 2008 with Tamir Shemesh of the Corcoran Group, who was up until recently with Prudential Douglas Elliman, but Shemesh didn't fare very well, with "only one apartment going into contract" during a few-month period, Sela said.
Sela claimed Shemesh "didn't put any attention into the building."
Shemesh, however, attributed the struggling sales to a down economy and said that the developers took it off the market because of the recession.
As a result of cancelling their sales efforts at the building in late 2008, Elliman filed a lawsuit in May 2010 against Sela and Idi, for $130,000 in unpaid broker termination fees. The lawsuit was dropped a month after it was filed, Azaria said.
Elliman declined to comment.
Developers Sela and Idi reopened the building as a youth hostel in August 2008, before it was closed by DOB in April 2010, due to improper zoning.
Sela blames this on other people.
"We did great but then we realized that we got... bad advice from zoning people and zoning lawyers," Sela said. "All the advice we got obviously was wrong."
After closing its doors as a hostel, Azaria said that "the owners cleared everything out," and remarketed it as a condo to investors.
Sela said Azaria was able to sell the building "literally one month after we hired him," adding that he received three separate offers for it.
For Azaria, Sela is effusive with praise, claiming that Azaria "didn't sleep" until he sold the building and that he "pushed the marketing so hard [that] I don't know how we got to these people."