The Real Deal New York

RedSky, Megalith score big in $37M sale of Park Slope rentals

Investment firm sells Eighth Ave. properties to Israeli family a few years after paying $17M

July 07, 2015 02:15PM
By Mark Maurer

RedSky buy

From left: 719-723 and 704 Eighth Avenue in Park Slope (credit: Ben Bernstein and Adam Hess)

UPDATED, 10:19 a.m., July 7: RedSky Capital and Megalith Capital Management sold a pair of Park Slope rental buildings for $37 million, in one of the neighborhood’s priciest multifamily deals on a per-square-foot basis to date, The Real Deal has learned.

An unidentified Israeli family with several Brooklyn holdings paid $811 per square foot, sources said. RedSky, a Brooklyn-based investment firm led by Ben Bernstein and Ben Stokes, paid a combined $16.6 million for the walk-up buildings at 719-723 Eighth Avenue and 704 Eighth Avenue, in two separate transactions in 2011 and 2012.

RedSky and Megalith proceeded to gut-renovate 32 of the 45 apartments and expanded three of them into duplexes. Of the rentals, 10 units are rent-regulated. There are also two office units. The properties span nearly 46,000 square feet and have a 4.1 percent cap rate.

RedSky, which is also an active investor in Williamsburg retail, put the buildings on the market for $41 million in January. Ofer Cohen and Adam Hess of TerraCRG represented RedSky in the deal.

“You don’t normally find multifamily sales of this scale in this area,” Hess said.

Elsewhere in the neighborhood last year, a four-story rental building at 857 Union Street sold for $842 per square foot, or $8.6 million, and a five-story rental building at 401 12th Street sold for $800 per square foot, or $5.8 million, records show. Hess also served as a broker on those deals.

The buyer is planning a long-term hold for the buildings, sources said.

In February, Douglas Eisenberg’s A&E Real Estate acquired a three-borough 32-building multifamily portfolio from the Dermot Co. for north of $360 million – six of which were in Park Slope.