Two-year-old Benchmark Real Estate Services has listed a multi-family property at 156 Sullivan Street for $15.75 million, aiming to repeat the success of a profitable flip this fall.
Benchmark, which was formed in 2009 by Aaron Feldman and Jordan Vogel and owns 10 buildings with about 400 rental apartments in total, purchased 156 Sullivan Street, a 40-foot-wide walk-up with 22 fair-market and rent-regulated apartments, last year for $6.05 million. The fair market apartments have been fully gut renovated, according to the listing. Benchmark declined to comment on the new listing.
Benchmark sold its first building, at 142 Sullivan Street, in October for $9.4 million. Vogel and Feldman bought the property, a 16,212-square-foot, 28-unit rental building, in 2009 for just $5.9 million, according to data from PropertyShark.com. In the meantime, the firm managed to increase the rent roll of the building by 35 percent in and filled one of the building’s retail vacancies.
“A lot of people don’t think of the rent-stabilized, multi-family investment class as one that has a yield of 20 percent returns,” Feldman told The Real Deal at the time of the first sale, “but this is actually a 60 percent return on equity and a 35 percent internal rate of return.”
The building at 156 Sullivan Street is “a very attractive investment, because the owners have done a significant amount of improvements to the building,” said Bob Knakal, chairman of Massey Knakal Realty Services, which is marketing the building. The property still has a tremendous amount of value that can be unlocked, he noted, as “the rent level of the building is still only two-thirds of the market rate.” As apartments roll over, the new owners would be able to take advantage of that.
The three commercial spaces at 156 Sullivan Street are each leased at rates that below-market rates to boutique retailers Musa Salon and Organic Avenue, as well as neighborhood mainstay Joe’s Dairy. The current gross scheduled income is approximately $1 million annually, according to the listing.
As The Real Deal previously reported, the market may be tightening for multi-family properties. According to the most recent data from Ariel Property Advisors, 41 multi-family transactions took place citywide in September, totaling $402 million. That’s a 31 percent increase from the previous month.
Multi-family buildings are always popular investments in New York, Knakal said, because of their scarcity, their guarantee of cash flow, and the relative of ease in finding financing for such projects.