[Updated at 6:30 p.m. with comment from a managing partner at Friedman-Roth Realty Services] Soho-based Benchmark Real Estate Group has sold its first building, also the first building it purchased, at 142 Sullivan Street for $9.425 million, according to Aaron Feldman, co-founder of Benchmark, and public records filed Tuesday.
The buyer, Feldman said, is Edward Ostad, owner of Galiano LLC, an entity of Vorillas LLC, which is listed as the purchaser in city records.
Olstad and representatives of Vorillas could not immediately be reached for comment.
George Niblock, a managing partner at Friedman-Roth Realty Services, represented both the buyer and seller in the off-market transaction. Niblock said he had worked with the buyer before and already had other properties in the Bronx and was looking to upgrade to a more “primary” property. The deal grew out of an unsolicited offer from the buyer, he said.
Benchmark bought the multi-family property in October 2009 for $5.9 million, according to Feldman and public records. The 16,212-square-foot building, between Prince and West Houston streets in Soho, has 28 rental units comprising 15,287 square feet of residential space and two retail units occupying 925 square feet together.
“We felt like we bought it right, added value and executed a business plan, as we intended when we closed,” Feldman said. “We had an opportunity to take some money off the table and return a nice profit to our investors and ourselves, and so it made all the sense in the world for us to sell.”
The reason for the 60 percent price hike just two years after purchasing the building in the recession, is that Benchmark was able to increase the rent roll of the building by 35 percent in just under two years, improving the quality of the building and the apartments through renovations, Feldman said. In addition, Benchmark was able to fill one of the retail vacancies with Rabbits café, which opened in spring 2010.
“When we bought the building there weren’t really any transactions going on,” Feldman said. “Banks weren’t willing to finance, so we put a good bit of cash into the building, and the market has improved…the banks are lending more on stable income, so we were essentially able to do a good deal.”
Benchmark bought the building from the Allrose Group, and the building was also Allrose’s first purchase, Feldman said.
The buyer is the type of investor who has different investment criteria than Benchmark does, Feldman said, in that he was interested in buying quality assets and holding them long term.
Benchmark, which was formed in 2009, owns 10 buildings with about 400 rental apartments, all in the East Village, Greenwich Village and Soho areas.
“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 said, “but this is actually a 60 percent return on equity and a 35 percent internal rate of return.”