Delshah Capital signs $17.7M refi with Amherst Capital for 27-unit walkup in Lower East Side

Delshah Capital through the entity DS 138 Ludlow LLC as borrower signed a refi loan with lender Amherst Capital Management through the entity Acm Cre Fund I-L, Lp valued at $17.7 million for the midblock 27-unit residential walkup building at 138-140 Ludlow Street in Lower East Side, Manhattan.
The deal closed on January 13, 2022 and was recorded on March 14, 2022. The prior lender was Amherst Capital Management which held debt that had an original loan amount of $16.9 million.The property has 18,180 square feet of built space according to PincusCo analysis of city data. The loan price per built square foot is $973 per the PincusCo analysis. (The price per square foot analysis is the transaction price divided by square feet as reported in public records and assumes no air rights have been sold.)
The owner bought the property on January 16, 2018, for $18.9 million. The signatory for Delshah Capital was Michael Shah. The signatory for Amherst Capital Management was Jason Rottinger. Michael Shah is the founder of Delshah Capital.

Prior sales and revenue

The owners according to the Department of Housing Preservation and Development includes Michael Shah, head officer and Ricardo Sabillon, site manager. The business entities are Ds 138 Ludlow Llc and Ds 138 Ludlow Llc. The 18,180-square-foot property generated revenue of $954,895 or $53 per square foot, according to the most recent income and expense figures.

The property

The 138-140 Ludlow Street parcel has frontage of 47 feet and is 89 feet deep with a total lot size of 4,235 square feet. The zoning is C4-4A which allows for up to 4 times floor area ratio (FAR) for commercial and up to 4 times FAR for residential with inclusionary housing. The city-designated market value for the property in 2022 is $4.1 million.

Violations and lawsuits

The property was not involved in any lawsuits or bankruptcies in the past years. In addition, according to city public data, the property has received $2,200 in OATH penalties in the last year.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $5 million on this tax lot.

The neighborhood

In Lower East Side, the majority, or 60 percent of the 33.2 million square feet of built space are residential elevator buildings, with residential walkup buildings next occupying 15 percent of the space. In sales, Lower East Side has 2.5 times the average sales volume among other neighborhoods with $677.8 million in sales volume in the last two years and is the 18th highest in Manhattan. For development, Lower East Side has 2.4 times the average amount of major developments relative to other neighborhoods and is the 9th highest in Manhattan. It had 2.2 million square feet of commercial and multi-family construction under development in the last two years, which represents 7 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of 14 of the 86 commercial properties representing 194,124 square feet of the 657,605 square feet. The largest owner is Usher Kahan, followed by Hubb Nyc and then 145 Ludlow LLC. There is one active new building construction project totaling 2,126 square feet. It is a 2,126-square-foot M building developed by Hesky Haim with plans filed July 17, 2015 and it has not been permitted yet.

The majority, or 50 percent of the 515,045 square feet of built space are residential walkup buildings, with residential elevator buildings next occupying 23 percent of the space.

The borrower

The PincusCo database, which is not complete, currently indicates that Delshah Capital owned at least 12 commercial properties with 350,054 square feet and a city-determined market value of $46.9 million. (Market value is typically about 50% of actual value.) The portfolio has $216.8 million in debt, with top three lenders as Arbor Realty Trust, Signature Bank, and Patriot Bank respectively. Within the portfolio, the bulk, or 76 percent of the 350,054 square feet of built space are D3 properties, with residential walkup properties next occupying 17 percent of the space. The bulk, or 81 percent of the built space, is in Manhattan, with Brooklyn next at 19 percent of the space.

Surrounding

Within a 400-foot radius of 138-140 Ludlow Street, Pincusco identified 11 commercial real estate items of interests occurred over the past 24 months.
Of those 11 items, two were for major renovation including a certificate of occupancy change. They were one permit with a total initial cost of $1.3 million and one initial temporary certificate of occupancy issuance for a project that initially costed $1.3 million. The most recent of these two items was the temporary certificate of occupancy on January 8, 2021 for a 4,283-square-foot B building with N/A residential units at 137 Ludlow Street.
One of those 11 items was a sale which Yucaipa Companies bought the 9,777-square-foot, two-unit mixed-use building (K4) on 137 Ludlow Street for $15.3 million from Princeton Holdings on March 16, 2020.
Of those 11 items, eight were loans above $5 million totaling $68.2 million. The most recent of the eight was Slate Property Group which borrowed $11.9 million from Signature Bank secured by the 11,000-square-foot, 22-unit rental (C7) on 153 Ludlow Street and one other property on January 11, 2022.

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