Lion Cub Development, Highstone Capital pay $2.4M for SoHo retail following foreclosure

Lion Cub Development and Highstone Capital through the entity 170 Mercer Retail LLC paid $2.4 million through a real estate owned sale to Rialto Capital Management through the entity Rss Msc2019-L2 Ny 1ml, LLC for the retail condo at 170 Mercer Street, also known as 597 Broadway, in SoHo, Manhattan. The expected use is cash flowing.
The deal closed on December 23, 2024 and was recorded on February 10, 2025. The property has 2,013 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $1,167 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 seller acquired the property from Delshah Capital on November 21, 2022, in a foreclosure that valued the property at $5.2 million, though that price was likely the loan and judgment, not a market value. The signatory for Rialto Capital Management was Adam Singer . The signatory for Andrew Aryeh’s Lion Cub Development and Highstone Capital was David Elbaz of Highstone. The contract date was October 24, 2024.

Rialto Capital Management as asset manager for the bondholders of Series 2019-L2, took the property back through a foreclosure in November 2022. The prior debt was $4.93 million originated in 2019. Traded reported the sale.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Lion Cub Development had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Rialto Capital Management purchased one property in one transaction for a total of $3.9 million and had not sold any properties over the same time period.

The property

The retail condo in SoHo has 2,013 square feet of built space according to a PincusCo analysis of city data. The parcel has a total lot size of 2,013 square feet. The city-designated market value for the property in 2022 is $1.3 million.

Violations and lawsuits

There were no lawsuits or bankruptcies filed against the property for the past 24 months. In addition, according to city public data, the property has not received any significant violations in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on April 5, 2016. There are no active new building construction projects or major alteration projects with initial costs more than $1 million on this tax lot.

The neighborhood

In SoHo, The bulk, or 46 percent of the 9.5 million square feet of commercial built space are office buildings, with mixed-use buildings next occupying 14 percent of the space. In sales, SoHo has 2.9 times the average sales volume among other neighborhoods with $775.4 million in sales volume in the last two years and is the 13th highest in Manhattan. For development, SoHo has had very little major development activity relative to other neighborhoods.It had 481,647 square feet of commercial and multi-family construction under development in the last two years, which represents 5 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of three of the six commercial properties representing 191,552 square feet of the 346,224 square feet. The largest owner is Pater M. Brant, followed by Rafael Ortiz and then Aryeh Realty.
There are no active new building construction projects on this tax block.

The majority, or 40 percent of the 346,224 square feet of built space are retail buildings, with office buildings next occupying 25 percent of the space.

The seller

The PincusCo database currently indicates that Rialto Capital Management owned at least two commercial properties with eight residential units in New York City with 118,813 square feet and a city-determined market value of $74.5 million. (Market value is typically about 50% of actual value.) The portfolio has $5 million in debt, borrowed from Signature Bank. Within the portfolio, the bulk, or 95 percent of the 118,813 square feet of built space are office properties, with walkup properties next occupying 5 percent of the space. The bulk, or 95 percent of the built space, is in Manhattan, with Brooklyn next at 5 percent of the space.

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