RH pays $57.7M to Delshah Capital for hotel in Meatpacking District

RH, formerly known as Restoration Hardware, through the entity RH Gansevoort LLC paid $57.7 million to Delshah Capital through the entity Griffon Gansevoort Holdings LLC for the RH Guesthouse hotel building (H2) at 55 Gansevoort Street in Meatpacking District, Manhattan.
The deal closed on December 18, 2023 and was recorded on January 31, 2024. The property has 24,699 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $2,336 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 bought the property on July 20, 2012, for $15.6 million. The signatory for Delshah Capital was Michael Shah. The signatory for RH was Jack Preston. The contract date was November 3, 2023. PincusCo first reported the contract, in November. The sale was arranged in a friendly bankruptcy process.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Restoration Hardware had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Delshah Capital purchased two properties in two transactions for a total of $74.5 million and sold 39 properties in 12 transactions for a total of $108.5 million over the same time period.

The property

The hotel building in Meatpacking District has 24,699 square feet of built space according to a PincusCo analysis of city data. The parcel has frontage of 115 feet and is 64 feet deep with a total lot size of 3,740 square feet. The lot is irregular. The zoning is M1-5 which allows for up to 5 times floor area ratio (FAR) for manufacturing. The property is in the Gansevoort Market Historic District. The city-designated market value for the property in 2022 is $8.2 million.

Violations and lawsuits

The property was involved in zero lawsuits and one bankruptcy over the past two years. The bankruptcy was filed on November 6, 2023, by Delshah Capital citing assets of $57.7 million. In addition, according to city public data, the property has received two DOB violations, one housing violation, and $1,310 in OATH penalties in the last year.

Development

For the tax lot building, it received its initial certificate of occupancy on October 17, 2012. On the lot, there is one active major alteration construction project for a 13-unit, 18,657 square-foot R-1 building. The project was submitted by Michael Shah with plans filed June 27, 2016 and permitted September 18, 2018.

The neighborhood

In Meatpacking District, The bulk, or 26 percent of the 2 million square feet of commercial built space are office buildings, with retail buildings next occupying 26 percent of the space. In sales, Meatpacking District has the 44th highest sale turnover among other neighborhoods in Manhattan with $22.5 million in sales volume in the last two years. For development, Meatpacking District has had very little major development activity relative to other neighborhoods.It had 13,197 square feet of commercial and multi-family construction under development in the last two years, which represents 0.66 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of four of the 18 commercial properties representing 97,706 square feet of the 264,397 square feet. The largest owner is William Gottlieb Real Estate, followed by Krewe and then Delshah Capital.
There are no active new building construction projects on this tax block.

The majority, or 75 percent of the 264,397 square feet of built space are mixed-use buildings, with specialty buildings next occupying 9 percent of the space.

The seller

The PincusCo database currently indicates that Delshah Capital owned at least 39 commercial properties with 592 residential units in New York City with 709,007 square feet and a city-determined market value of $157.4 million. (Market value is typically about 50% of actual value.) The portfolio has $511.7 million in debt, with top three lenders as Arbor Realty Trust, Apollo Global Management, and Signature Bank respectively. Within the portfolio, the bulk, or 40 percent of the 709,007 square feet of built space are walkup properties, with elevator properties next occupying 37 percent of the space. The bulk, or 60 percent of the built space, is in Manhattan, with Brooklyn next at 40 percent of the space.

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