Capital One Sells Mortgage Note on 55 Gansevoort to DelShah Capital

BY  MAY 8, 2012 9:00 AM

DelShah Capital has snapped up the note on a 26,000-square-foot, five-story Meatpacking District building it had been eyeing for several months—taking the first mortgage and senior liens on 55 Gansevoort Street from lender Capital One Bank.The firm plans to renovate some floors, creating office space. It may also partner with a restaurant currently occupying space in the building.

Michael Shah, principal and CEO of DelShah Capital, told The Commercial Observerthat the deal was complex because a restaurant, Villa Pacri, occupies several floors there.

“There was a tenant in the space that had the rights to most of the floors, so we had been talking to the tenant in conjunction with the lender and restructured the tenant’s lease as well,” Mr. Shah said. “The negotiations didn’t really focus on the term, they focused on them giving backcertain spaces at the landlord’s option.”

Mr. Shah said that his firm had a previous relationship with the lender, which sped the negotiations along. “It wasn’t just a first mortgage,” he explained. “It was a first mortgage and a series of liens that all-in-all probably exceed the value of the building. Effectively the lender controlled the building.”

The amount owed on the senior liens is roughly $30 million.

In addition to Villa Pacri, 55 Gansevoort is home to nightspot Gun Bar. Though if Mr. Shah has his way, more retail and nightlife is headed there soon. He said that DelShah Capital will be entering into a joint venture with Villa Pacri. In addition it has applied to the Landmarks Preservation Commission seeking permission to open a rooftop bar there, which Mr. Shah hopes will happen by next summer.

“One of the other things that we’re doing that’s going to be kind of interesting is that we’re going to be doing some retail pop-up shops in the Gun Bar space,” he said, adding that Gun Bar is closed three or four days a week during the daytime.

He said that negotiations are still underway with retailers, whom he declined to mention by name. However, he said that they would be high-end.