Manhattan’s largest office landlord, SL Green Realty, partnered with residential manager and developer Magnum Real Estate Group to buy newly constructed apartment units in Williamsburg for $51.5 million.
The publicly traded real estate investment trust SL Green and the privately held Magnum purchased 44 condominium units at 195 Berry Street for $19.58 million, or about $445,000 per unit; 28 condos at 248 Bedford Avenue, for $14.1 million, or about $503,000 per unit; and 12 townhouses at 129 North Third Street for $17.8 million, or about $1.5 million each.
SL Green announced earlier this month that it would be acquiring two properties in Williamsburg, but did not identify the buildings by address or its partnership with Magnum, a development firm led by Benjamin Shaoul.
The apartments in the Berry and Bedford buildings are being rented, while the townhouses will be put on the market for sale, Shaoul said. The rentals range from $2,600 per month for a studio to $7,000 per month for a two-bedroom With A Terrace.
The purchase from developer Triton Realty Group went into contract in August 2012, and closed on March 22, city records show. There were no brokers on the transaction, Shaoul said.
The three properties are adjacent along North Third StreetBetween Berry Street and Bedford Avenue.
The purchase is the latest in Williamsburg from major institutional investors such as Sam Zell’s Equity Residential, Invesco, and American Realty Advisors, drawn by the strong rent prices and demand from tenants.
“This further establishes that the big players are coming into Brooklyn,” said David Behin, a partner at brokerage MNS, and president of the firm’s investment sales and capital advisory group. Behin was not a broker on the transaction.
MNS was tapped to be the sales agent for the 12 townhouses, which will come to market pending approval of the condominium offering plan, expected in the next several months, Behin said. The rental units are being marketed in-house.
While the price per unit figures were higher than many other recent multi-family purchases in the borough, it was nowhere near what American Realty paid in 2012 for 111 Kent Avenue, which topped $900,000 per apartment.
Triton, headed by Abraham Bennun, declined to comment, citing a confidentiality agreement. SL Green declined to comment.
In SL Green’s first quarter earnings call, Matthew DiLiberto, the company’s chief accounting officer, said the firm would keep the rentals but would sell the townhouses.
The buy was not entirely a surprise, insiders said, because SL Green and Magnum in 2010 paid $20.8 million for the retail space under the apartments. This is not SL Green’s only asset in Brooklyn. The REIT owns the 38-story office tower 16 Court Street, in Downtown Brooklyn, which it purchased in 2007 for $107.5 million.
“We began our acquisitions in the neighborhood in 2010 with the retail, and continue our acquisitions with residential,” Shaoul told The Real Deal, adding that he expected to buy more.
“We look for off-market deals,” he said, when asked whether prices were getting too high.
Magnum, which has tussled with tenants in its Manhattan apartments and developments over the years, has also been a frequent partner with institutional investors. Earlier this year, Magnum sold a residential rental portfolio it owned with Midtown-based Westbrook Partners for $130 million, and another package it owned with Meadow Partners for $49 million.