Unreal Estate: $28 Million Art Condos in N.Y.

The Palazzo Chupi in Manhattan's West Village has been the embodiment of Pablo Picasso's sternest warning to his disciples: The chief enemy of creativity is "good" sense.

Artist Julian Schnabel, known as much for his outsized ego and pals like Lou Reed as for his neo-expressionist art and films "Basquiat" and the "The Diving Bell and the Butterfly," has heard for months what the $14.95 million penthouse and $12.95 million duplex unit in his "Pompeii red," Euro-inspired building at 360 W. 11th St. aren't: Namely, sold.

Schnabel painted his building "Pompeii red."

Lost amid speculation about potential buyers (Richard Gere bought in, Bono and Madonna passed) and personal expense (Schnabel auctioned Picasso's "Femme au chapeau" from his collection for more than $7.7 million to cover the project's costs) is what the Palazzo Chupi properties are: Namely, works of art underappreciated in their time.

The Palazzo requires context that only its neighborhood near the West Side Highway can offer. Its first two floors, which house the 58-year-old Schnabel's studio and gallery, are still the slate gray that once blended in among the post-industrial shades of its surrounding apartment buildings and townhouses. On the nearby blocks just beyond Washington Street, you can see Reed walking a dog while wearing the brightest patterned shirt outside Havana, catch Julianne Moore's Emmy glinting in her front window or miss Michael Stipe, Jay-Z, Bono or Fatboy Slim enjoying a secluded bite at their celeb restaurant co-op The Spotted Pig.

It's a pocket of Manhattan where extraordinary people just want to do ordinary things like go to the Rite Aid(RAD Quote) or Starbucks(SBUX Quote), which makes the Palazzo Chupi frustrating at any price to neighbors who think it sticks out like a Pompeii red sore thumb. The Venetian balustrades along the Palazzo's tiled terraces and the curves of the wooden cathedral windows, however, more resemble a middle finger extended directly at the lifeless "luxury" boxes erected just blocks down the Hudson River. Schnabel's works definitely weren't built by Toll Brothers(TOL Quote) or Lennar(LEN Quote).