Silvershore lists LES mixed-use building at 200% markup

One year later, company says retail appreciation warrants price hike
By Katherine Clarke | August 21, 2013 04:15PM

Silvershore Properties, a multi-family owner with more than 30 properties in Manhattan and Brooklyn, is in discussions to sell a Lower East Side residential rental building at 101 Delancey Street, The Real Deal has learned.

Silvershore is asking $20.5 million for the property, on the corner of Ludlow Street, which it bought for just $7 million last year – an almost 200 percent markup. Peter Von Der Ahe and Joe Koicim of commercial brokerage Marcus & Millichap are marketing the building.

Jason Silverstein, who founded Silvershore with David Shorenstein, told The Real Deal that the property warranted its new price tag thanks to a recent renovation of 12 of the building’s 20 apartments. Leases for the building’s five retail spaces on the ground floor, which account for 96 feet of frontage on Delancey Street, are also set to expire in the coming months, meaning that a new owner could attract a large retail tenant at significantly higher rents than the spaces are currently achieving.

The second floor of the property, which currently consists of all free-market apartments, can also be converted to retail use under the building’s current zoning restrictions.

Silverstein also pointed to the renewal program for the area around the nearby Seward Park, which is set to transform more than six acres of underutilized land into a mixed-use space with more than 1,000 units of housing as well as office and retail space. The renewal program, spearheaded by the city, is expected to draw a large number of residents to the neighborhood, which will, in turn, increase the value of the retail along Delancey Street, he said.

“You’re going to see a real transformation [of the neighborhood,]” Von Der Ahe said. “Investors will want to be on the front edge of that.”

Indeed, major New York City investors and developers have flooded into the neighborhood leading up to the renewal efforts and have gravitated particularly towards product that has a significant retail component, sources said.

Earlier this month, David Edelstein’s Tristar Capital paid $15.75 million for the 11,000-square-foot retail space at the residential condo 250 Bowery and Joel Schreiber’s Waterbridge Capital bought a residential and retail building at 57-63 Orchard Street in partnership with developer Jackie Jangana for $27 million.

The 19,000-square-foot property on Delancey Street has a mix of residential units consisting of six two-bedroom apartments and 14 three-bedroom apartments, according to an offering memorandum seen by The Real Deal. Of the 20 apartments, 14 are free-market, five are rent-stabilized and one is rent-controlled.

Silverstein declined to comment on the identities of the investors with whom Silvershore is in discussions.