RedSky buys Williamsburg development site from Thor, lands $222M refi of neighborhood portfolio

The Brooklyn-based firm is expanding its retail holdings in the area ahead of the L train shutdown

Redsky's Benjamin Bernstein and renderings of 124-136 North 6th Street in Brooklyn (Credit: Cornell University and Thor Equities)
Redsky's Benjamin Bernstein and renderings of 124-136 North 6th Street in Brooklyn (Credit: Cornell University and Thor Equities)

As Williamsburg braces itself for the 15-month L train shutdown, Brooklyn’s RedSky Capital is expanding its portfolio in the heart of the neighborhood.

The Dumbo-based firm paid $32.25 million to buy a four-parcel development site at the corner of North 6th and Berry streets from Thor Equities, sources familiar with the sale told The Real Deal. RedSky simultaneously received $221.8 million from JP Morgan Chase to fund the acquisition and pay down existing debt on a dozen other nearby properties.

The financing is a three-year, interest-only bridge loan, and replaces $138.57 million that the alternative lender KKR provided two years ago for RedSky’s properties on North 6th Street and Bedford Avenue.

The landlord had spent $137 million acquiring the portfolio over the previous three years. Its latest purchase includes includes a trio of low-slung buildings and a vacant lot at 124-136 North 6th Street, two blocks away from the Bedford Avenue subway stop. Joseph Sitt’s Thor bought the properties in 2014 for $21.5 million and had drawn up plans for a three-story, 34,500-square-foot retail development at the site.

Melissa Gliatta, Thor’s chief operating officer, said, “We felt the time was right to sell this prime Williamsburg asset for our investors.”

Representatives for RedSky, founded by principals by principals Benjamin Bernstein and Benjamin Stokes in 2006, declined to comment on their plans for the site.

This isn’t the first deal between Thor and RedSky, at least not in New York. Thor in 2016 sold a portfolio of eight properties in Miami’s Design District to RedSky for $128.3 million.

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The Williamsburg properties, meanwhile, add to the sizable portfolio RedSky and its partner, London-based private equity fund JZ Capital Partners, own in the neighborhood.

JLL’s Jonathan Schwartz arranged the refinancing with his colleagues Aaron Appel, Michael Diaz and Sean Baillie.

“This bridge loan will allow our client to refinance, acquire and fund capital improvements on this collection of well-located retail assets,” Schwartz said.

JP Morgan earlier this year provided RedSky and JZ Capital with a $104 million loan a different set of properties in the neighborhood dubbed the Redbridge portfolio.

RedSky’s investment in Williamsburg retail comes at a time of challenges for the neighborhood. Beginning in October, the Metropolitan Transportation Authority plans to shut down weekend L train service between Manhattan and Brooklyn for 15 weekends as the agency prepares to shut down service for 15 months beginning in April 2019 to prepare tunnels under the East River.

Retail leasing in Williamsburg took a pause after officials first announced the transit plans, and the neighborhood’s prime stretches are experiencing high vacancy rates, as TRD reported in December.

Average asking retail rents on North 6th Street and Bedford Avenue — already among the priciest in the borough — climbed slightly earlier this year, according to the Real Estate Board of New York’s winter Brooklyn retail report.

On North 6th Street between Driggs and Kent avenues, average asking rents grew 3 percent from the previous winter to $225 per square foot, the report showed. And on Bedford Avenue between Grand and North 12th street, average asks grew 7 percent year over year to $317 per square foot.