Lendlease pays over $100M for large Greenpoint development site

Seller JZ Capital Partners struggled with $1B real estate bet

Lendlease's Melissa Burch and 18 India Street in Greenpoint (Google Maps; Connect Conferences)
Lendlease's Melissa Burch and 18 India Street in Greenpoint (Google Maps; Connect Conferences)

A London-listed private equity firm that struggled with a $1 billion bet on U.S. real estate unloaded one of its large Brooklyn development sites for more than $100 million.

David Zalaznick’s JZ Capital Partners sold its stake in the large waterfront property at 18 India Street in Greenpoint to the multinational construction and development firm Lendlease, sources familiar with the sale told The Real Deal.

Lendlease paid $110.8 million all cash for the site — which has enough development rights for a residential tower of nearly 650,000 square feet — in a partnership with the Australian pension fund Aware Super. The partners plan to build a mixed-use tower on the 2.6-acre site with 800 rental units, 30 percent of which will be set aside as affordable housing.

Lendlease managing director Jason Alderman said the company is committed long-term to the New York market, and added that the firm’s relationships with investment partners allow it to “capitalize on attractive opportunities.”

A representative for JZ Capital did not immediately respond to requests for comment.

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The sale marks the end of one chapter at the Greenpoint property, which got caught up in one of the biggest boom-to-bust stories of Brooklyn real estate during the last cycle.

One of Zalaznick’s personal friends, attorney Jonathan Bernstein, bought the site in 2009 for $83.5 million. Bernstein’s son Ben Bernstein and his pal Ben Stokes oversaw the development through their firm RedSky Capital, which partnered with JZ Capital on $1 billion worth of real estate in New York City and Miami.

The portfolio ran into a wall last year, however, when JZ Capital realized it had overvalued its real estate book and had to take a massive write-down on its investments.

One source familiar with the deal for 18 India Street said RedSky is maintaining a stake in the project.