Long-time owners sell SoHo commercial for $40M to Spear Street Capital

Spear Street Capital through the entity 165 Mercer Owner LLC paid $40 million to the Batt family through the entity 165 Mercer Property Owner LLC for the commercial building at 165 Mercer Street in SoHo, Manhattan. The expected use is cash flowing.

The deal closed on February 21, 2025 and was recorded on February 26, 2025. The contract date was December 23, 2024.
The signatory for the seller was Jay Batt. The family has owned the building since the 1960s, then partnered with Flank, the architecture firm, to redevelop it. The signatory for Spear Street Capital was CEO John Grassi.

The buyer financed the purchase with a $24 million loan from Blackstone Group’s Husky Finco LLC.

In 2018 Crain’s wrote about the rehabilitation of the building into office space and retail.

In 2020, the Batts and Flank obtained a $38 million loan for the property.

Spear Street owns at least four other buildings in Manhattan, according to a PincusCo analysis of property records.

• office building on 446 Broadway, Little Italy (1002320006)

• office building on 32 Howard Street, Little Italy (1002320021)

• retail building on 635 Avenue Of The Americas, Chelsea (1007950037)

• office building on 641 Avenue Of The Americas, Chelsea (1007950044)

The property

The retail building in SoHo has 30,020 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 50 feet and is 100 feet deep with a total lot size of 5,000 square feet. The zoning is M1-5/R7X which allows for up to 5 times floor area ratio (FAR) for manufacturing and up to 5 times FAR for residential with inclusionary housing. The property is in the SoHo-Cast Iron Historic District. The city-designated market value for the property in 2022 is $11.2 million. The most recent loan totaled $38 million and was provided by Barings on January 17, 2020.

Prior sales and revenue

The 30,020-square-foot property generated revenue of $2.2 million or $73 per square foot, according to the most recent income and expense figures.

Development

For the tax lot building, it received its initial certificate of occupancy on March 27, 2019.

Violations and lawsuits

According to city public data, the property has received $2,400 in OATH penalties in the last year.

There were no lawsuits or bankruptcies filed against the property for the past 24 months.

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 near average sales volume among other neighborhoods with $668.5 million in sales volume in the last two years and is the 16th highest in Manhattan. For development, SoHo has near average amount of major developments among other neighborhoods and is the 31st highest in Manhattan. It had 485,516 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 seven of the 10 commercial properties representing 180,564 square feet of the 197,089 square feet. The largest owner is Bd Hotels, followed by Blair Axel and then Centurion Realty. There are no active new building construction projects on this tax block.

The owner

The PincusCo database currently indicates that Flank owned at least one commercial property in New York City with 30,020 square feet and a city-determined market value of $11.6 million. (Market value is typically about 50% of actual value.) The portfolio has $104.1 million in debt, borrowed from Colony Capital and Barings. The portfolio consists of at least a single retail property. It is located in Manhattan.

The surrounding

Within a 400-foot radius of 167 Mercer Street, PincusCo identified seven commercial real estate items of interests occurred over the past 24 months. Of those seven items, five were sales above $5 million totaling $95.4 million. The most recent of the five was Caudalie which bought one condo unit in the 3,048-square-foot, six-unit mixed-use building (RM) on 130 Greene Street for $9.8 million from TriState Equities on September 11, 2024. Of those seven items, two were loans above $5 million totaling $19.1 million. The most recent of the two was Brodsky Organization in which borrowed $14.1 million from Daniel Brodsky secured by two condo units in the 5,076-square-foot, 33-unit mixed-use building (RM) on 19 West Houston Street and two other properties on April 2, 2024.

Direct link to the property’s ACRIS page and link to DOB NOW portal.