BNF Capital Acquires Mixed-Use Building in Meatpacking District

News Summary

BNF Capital has entered into a contract to purchase a mixed-use building in New York City’s Meatpacking District for $21 million. The deal is part of a bankruptcy proceeding involving current owner Delshah Capital, which has filed for Chapter 11 protection. With retail units currently vacant and limited occupancy in residential apartments, the future of the property remains uncertain. BNF Capital’s recent investment strategy also reflects broader trends in the commercial real estate market amidst challenges from tenant defaults and the pandemic’s financial impacts.

New York City – BNF Capital, a financial institution based in London, has entered into a contract to acquire a mixed-use building at 58-60 Ninth Ave. in the Meatpacking District for $21 million. This transaction is part of a joint bankruptcy proceeding involving this property and another one a few blocks away, as current owner Delshah Capital has filed for Chapter 11 bankruptcy protection.

The property at 58-60 Ninth Ave. consists of three stories, with retail space on the ground floor and residential apartments situated above. Currently, both retail units are vacant, while two out of three of the residential apartments are occupied. In addition, the nearby property at 69 Gansevoort St. is entirely vacant and is under contract to be sold for $9.3 million to another buyer managed by Iconiq.

Delshah Capital, which originally purchased the buildings in 2012 and 2013 for a combined $26.8 million, has struggled financially, primarily due to a default on a $28 million loan associated with both properties. The company also has a $6.7 million judgment against a former tenant, Free People, for unpaid rent that accumulated during the COVID-19 pandemic. A federal court ruled in 2022 that Free People owed a total of $13 million for back and future rent related to its 6,800 square-foot storefront at 58-60 Ninth Ave.

With approximately $35.2 million in debt to address from the two properties, Delshah Capital’s financial situation has compelled it to proceed with the bankruptcy filing. The sale is expected to close in October, although BNF Capital has not disclosed any plans for the future use of the property.

Nic Fallows, director of BNF Capital, signed the agreement on behalf of the buyer, while Michael Shah, CEO of Delshah Capital, represented the seller. BNF Capital has made other significant investments recently, including a $20.8 million purchase of a retail building at 43 Crosby St. in SoHo. This firm is affiliated with the Perrado family, who operate the Perenco oil company and have a history of investments in high-end real estate and luxury goods.

The deal serves as a reflection of the challenges faced within the commercial real estate market, especially regarding issues such as tenant defaults and the broader financial strain resulting from the pandemic. As BNF Capital proceeds with the purchase, both the immediate future of the property and the dynamics of the Meatpacking District’s real estate landscape remain uncertain.

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Additional Resources

• Crain’s New York: BNF Capital Contract Purchase Meatpacking District Building for $21M
• Wikipedia: Meatpacking District, Manhattan
• Commercial Observer: BNF Capital Buys 58-60 Ninth Avenue
• Google Search: Real Estate Market Challenges
• The Real Deal: Delshah Strikes Deal to Sell Distressed Property
• Google Scholar: Bankruptcy Real Estate
• Commercial Observer: Delshah’s Michael Shah and Prepackaged Bankruptcy
• Encyclopedia Britannica: Bankruptcy