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

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

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“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.