Rialto Capital affiliate acquires foreclosed Thor Equities retail in SoHo priced at $18.4M

A Rialto Capital affiliate through the entity RSS Comm2015dc1-NY 115, LLC, acquired 115 Mercer Street in SoHo, Manhattan, through a foreclosure auction from the prior owner Thor Equities, with the transfer price of $18.4 million. Rialto Capital was the special servicer for the loan with an original principal of $37 million.
PincusCo reported on the sale in December but did not identify the new owner or the transfer price.

The property is owned through two retail condominium units. Retail has been particularly hard hit in recent years, with many properties transferred at a loss or through foreclosure.
The auction occurred on October 26, 2022 and the transfer was recorded on April 10, 2023. The two condo units have 6,730 square feet of built space according to a PincusCo analysis of city data. The sale price per built square foot is $2,734 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 signatory for Thor Equities was Roberta Ashkin. The signatory for Rialto Capital was Niral Shah.
The lender Rialto Capital acquired the property through a foreclosure auction, with a $55.3 million deficiency. 850240/2019

Joe Sitt’s Thor Equities and Premier Equities bought the property in 2013 for $16.4 million, then Premier sold a stake to Thor, city records show. At the time of the acquisition, the owner borrowed $17 million, and a year later increased the debt to $37 million with a loan from Deutsche Bank, which packaged it into a CMBS loan, COMM 2015-DC1. In 2019, Rialto Capital acquired the debt and filed the pre-foreclosure action.

Prior sales and revenue

Prior to this transaction, PincusCo has no record that the buyer Rialto Capital had purchased any other properties and has no record it sold any properties over the past 24 months.
The seller Thor Equities had not purchased any other properties and sold or turned over 10 properties in eight transactions for a total of $191.4 million over the same time period.

The property

The retail condo in SoHo has 6,730 square feet of built space according to a PincusCo analysis of city data. The parcel has a total lot size of 3,711 square feet. The city-designated market value for the property in 2022 is $2.7 million.

Development

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 2.2 times the average sales volume among other neighborhoods with $771.9 million in sales volume in the last two years and is the 19th highest in Manhattan. For development, SoHo has had very little major development activity relative to other neighborhoods.It had 390,853 square feet of commercial and multi-family construction under development in the last two years, which represents 4 percent of the neighborhood’s built space.

The block

On the tax block of 115 Mercer Street, PincusCo has identified the owners of three of the 13 commercial properties representing 206,865 square feet of the 316,967 square feet. The largest owner is Sl Green Realty, followed by Rfr Holding and then Carl Stefan Erling Persson.
There are no active new building construction projects on this tax block.

The majority, or 66 percent of the 316,967 square feet of built space are office buildings, with mixed-use buildings next occupying 19 percent of the space.

The seller

The PincusCo database currently indicates that Thor Equities owned at least 23 commercial properties with 269 residential units in New York City with 654,700 square feet and a city-determined market value of None. (Market value is typically about 50% of actual value.) The portfolio has $248.8 million in debt, with top three lenders as MetLife, Athene Holding, and AB CarVal Investors respectively. Within the portfolio, the bulk, or 42 percent of the 654,700 square feet of built space are elevator properties, with industrial properties next occupying 23 percent of the space. The bulk, or 75 percent of the built space, is in Manhattan, with Brooklyn next at 25 percent of the space.

Direct link to Acris document. link