Rialto Capital acquires $5.2M retail condo from Delshah Capital in SoHo

Rialto Capital through the entity Rss Msc2019-L2-Ny 1ml, LLC acquired a retail condo at 597 Broadway in SoHo, Manhattan, for $5.2 million from Delshah Capital through the entity 170 Mercer LLC.
The deal closed on November 21, 2022 and was recorded on December 2, 2022. The property has 2,013 square feet of built space according to PincusCo analysis of city data. The sale price per built square foot is $2,568 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 December 21, 2007, for $2.6 million. The signatory for Delshah Capital was Michael K. Shah. The signatory for Rialto Capital Management was Niral Shah. Rialto Capital, which acts a special servicer for CMBS loans, took ownership of this property.

Prior sales and revenue

Prior to this transaction, the seller Delshah Capital purchased seven properties in four transactions for a total of $107.3 million and sold 33 properties in six transactions for a total of $55.3 million over the same time period.

The property

The 597 Broadway 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.

Development

There are no active new building construction projects or major alteration projects with initial costs more than $5 million on this tax lot.

The neighborhood

In SoHo, the bulk, or 46 percent of the 9.4 million square feet of commercial built space are office buildings, with mixed-use buildings next occupying 15 percent of the space. In sales, SoHo has 1.7 times the average sales volume among other neighborhoods with $592.6 million in sales volume in the last two years and is the 24th highest in Manhattan. For development, SoHo has had very little major development activity relative to other neighborhoods.It had 258,984 square feet of commercial and multi-family construction under development in the last two years, which represents 3 percent of the neighborhood’s built space.

The block

On this tax block, PincusCo has identified the owners of three of the 29 commercial properties representing 55,803 square feet of the 485,711 square feet. The largest owner is Rafael Ortiz, followed by Aryeh Realty and then Premier Equities.
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 Delshah Capital owned at least 46 commercial properties in New York City with 782,774 square feet and a city-determined market value of $187.8 million. (Market value is typically about 50% of actual value.) The portfolio has $346.7 million in debt, with top three lenders as Arbor Realty Trust, Signature Bank, and Customers Bank respectively. Within the portfolio, the bulk, or 42 percent of the 782,774 square feet of built space are walkup properties, with D3 properties next occupying 34 percent of the space. The bulk, or 61 percent of the built space, is in Manhattan, with Brooklyn next at 39 percent of the space.

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