Restoration Hardware signs $57.7M contract to buy MePa hotel from Delshah Capital

UPDATED 5:45 a.m., November 7, 2023: Restoration Hardware as buyer signed a $57.7 million contract with Michael Shah’s Delshah Capital as seller on November 3, 2023, to buy the RH Guesthouse, an 1887 loft building at 55 Gansevoort Street in the Meatpacking District, which the developer converted into luxury hotel units, according to a filing on the Tel Aviv Stock Exchange and bankruptcy court records.

The buyer was not disclosed in the TASE filing, but was disclosed in a prepackaged bankruptcy filing Delshah Capital made November 6, 2023 in Manhattan for the entity that owns the property, Griffon Gansevoort Holdings LLC.

According to the bankruptcy filing, “The deposit is $2,885,550 in escrow. The contract provides for December 1, 2023 target closing date and December 21, 2023 outside closing date.”

Bankruptcy 23-11771

According to a Meridian Capital Group offering memorandum, “RH is tenant to a 15-year NNN lease expiring in 2032 with 6.1% escalations every two years. Additionally, the lease includes three extension options out to 2057.

“RH currently leases 55 Gansevoort for $3.72 million per annum with 6.10% increases every two years inclusive of lucrative signage income. The tenant will also pay ~$4.2 million annually on a straight line basis for a total of $37.8 million in guaranteed rent payments based on the remaining nine years of the initial lease.”

Much of the proceeds of the sale will be used to pay off TASE bondholders according to this filing. Proceeds from the prepackaged bankruptcy of Delshah Capital’s 100 Christopher Street will also be used the make the bondholders whole.

The Real Deal reported last month that after a May 2023 contract to sell 55 Gansevoort Street fell through, $59 million in Delshah Capital bonds on the Israeli exchange were downgraded and became in a technical default since initially the proceeds from that sale would pay off the bondholders. Following that, Delshah put 100 Christopher Street into the prepackaged bankruptcy, and that property sold last month to Lions Group for $30 million.

Broker David Schechtman of Meridian Capital Group is the exclusive broker for the paroperty, asking approximately $70 million.

Delshah Capital acquired 55 Gansevoort Street through two loans and judgment lien in 2012 totaling $22 million and later converted the building into a 10-unit high-end hotel branded by RH, the former Restoration Hardware, which has a store a block away at 9 Ninth Avenue.

The surrounding

Within a 400-foot radius of 55 Gansevoort Street, PincusCo identified seven commercial real estate items of interests occurred over the past 24 months. Of those seven items, two were sales above $5 million totaling $21.3 million. Of those seven items, five were loans above $5 million totaling $243.9 million. The most recent of the five was Aurora Capital Associates in which borrowed $50 million from Webster Bank secured by the 39,068-square-foot, three-unit office building (O5) on 2 9th Avenue on March 2, 2023.

Direct link to the property’s ACRIS page.