A Manhattan Landlord Lists His Office Building as an NFT in ETH. Then it was reduced to $12 million.

A $29 million New York City office building went on the market two weeks ago, but with a Web 3 twist: the property rights are being sold as a non-fungible token (NFT) on OpenSea.

The listing price, on the other hand, was set in ether (ETH), which has dropped more than 40% since the beginning of June, taking the building's list price with it.

The NFT's monetary value has dropped from $29 million to $16.8 million, though its owner, Chris Okada, says the price will be adjusted soon.

"We're going to relist the sale at $29.5 million, most likely Thursday," Okada said on Twitter on Tuesday. "I'm debating whether to stick with ETH or switch to USDC." If we use ETH, it will be closer to 26,500 ETH."

It is currently available for 15,000 ETH. It was purchased in late 2021 for $16.25 million.

‘True utility’

Okada is the CEO of Okada & Co, a commercial real estate firm that owns 43 buildings in Manhattan and is looking to diversify its clientele through blockchain.

"There are crypto billionaires and crypto millionaires out there who have no real utility of their cryptocurrency other than having it in their wallet," Okada said in an interview with CoinDesk. "I see this as a marriage of my real estate experience and my interest in NFT."

Okada says he was inspired in part by Gary Vaynerchuck's Flyfish Club, an NFT membership collection with exclusive access to a yet-to-be-built restaurant.

How does the sale work?

The 109-111 W. 24th St. NFT is not the actual deed to the property, but rather an added security layer to prevent large-scale phishing or listing errors.

According to the listing, the NFT's owner is instead granted "exclusive rights to acquire the building, all its uses rights, and related deed covenants."

After purchasing the NFT, the buyer must go through all of the steps of a non-blockchain real estate transaction, with the exception of transferring funds. Buyers are also encouraged to speak with the company before finalizing the transaction and to negotiate a price. (According to Okada, eight potential buyers have already expressed interest.)

The sale exemplifies both innovative use cases for NFTs and their legal limitations, as New York's real estate registration system makes listing an actual deed as an NFT impossible.

"The sale is essentially a bridge between old-guard real estate servers and blockchain," Okada explained. "I'll be at that bridge, attempting to solve this connectivity problem." It might not be in New York; it might have to be in Westchester or Miami, or it might be in a forward-thinking city."

More to follow

Okada stated that his company has been experimenting with blockchain implementation for the past few months, but has run into legal complications with the Securities and Exchange Commission (SEC) regarding fractionalized ownership of property sales.

Future plans for blockchain-based real estate sales from the company include rentable office space and co-working desks, a concept recently brought to life in the SoHo neighborhood of New York City just two months ago.

“While I believe that we are moving in the direction of storing real property titles on-chain, and being able to effectuate property transfers and sales through on-chain mechanisms, we are not there yet,” pseudonymous crypto lawyer exlawyer.eth told CoinDesk. “Though it is exciting to see how people believe the blockchain can be used, and this is just one example of some of the innovative uses that we will see in the coming months and years.”

While this will be the first commercial office space sold as an NFT, the residential housing market has already seen its fair share of blockchain involvement. Propy, an NFT real estate company, sold its first NFT house in February.