Ben Bernstein is a name that is becoming increasingly familiar to the New York City real estate community at a rapid pace. Bernstein currently serves as President and Co-Founder of RedSky Capital, an integrated real estate development and investment firm based in the Dumbo section of Brooklyn, New York. In this capacity, Bernstein oversees all investments made by the firm, ensuring proper execution of the firm’s long-term strategy at the corporate and property-level. Since 2007, Bernstein has led the acquisition, financing, repositioning and leasing of over 700mm in real estate.
Bernstein graduated from Cornell’s College of Arts & Sciences with a Bachelor of Arts in Government in 2006. After working briefly as an analyst at PIMCO and Blue Marlin Ventures, he struck out with partner Benjamin Stokes (CALS ’06), to form RedSky Capital.
The success of RedSky’s ventures are not surprising given the tremendous amount of development that has taken place in Brooklyn since the mid-2000s. This past April 16, the Baker Program in Real Estate brought Bernstein to campus as part of its Distinguished Speaker Series. In his appearance, Bernstein spoke about several recent deals that RedSky has completed, most notably their success in bringing the first Apple Store to Brooklyn. Located at 247 Bedford Avenue at the corner of North 3rd Street, the store is anticipated to open by 2016. Like many successful retail developments, the landing of a prime tenant such as Apple is a final step in what is an often-arduous process.
The story of RedSky and 247 Bedford began in late 2010. By then, the stretch of Bedford Avenue between the Williamsburg Bridge and McCarren Park had emerged as the prime commercial and retail corridor in modern, gentrified Williamsburg. 247 Bedford has a prime location, being adjacent to another large retail development that went through several proposed tenants, including Marshall’s. By 2011, rumors had begun to swirl that Whole Foods was interested in the site.
Around the same time, RedSky in joint venture with JZ Capital Partners purchased the line of retail spaces at 247 Bedford in April 2012 for $64 million. At the time, the rents for the retail tenants at 247 Bedford were approximately 30% of the prevailing market rates in the area. Immediately, RedSky began to aggressively market 247 Bedford, proposing a number of solutions for a variety of upmarket tenants. Apple signed a long-term lease for 15,000 square feet in October 2013, a space that will incorporate the second floor of the complex, one of only few such developments in Brooklyn.
Since his appearance at Cornell, Bernstein has not missed a beat. In July 2015, 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. A foreign investor paid $811 per square foot, per a report by The Real Deal. RedSky had originally 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. The partnership then gut-renovated 32 of the 45 apartments and expanded three of them into duplexes, as well as adding two office spaces on the ground floor. The properties span nearly 46,000 square feet and have a 4.1 percent cap rate.
Finally, another recent series of deals completed by the firm offers a preview into the firm’s plans for a development in Downtown Brooklyn (“DoBro”, as the public increasingly calls it). Beginning in 2012, RedSky began buying up parcels within the triangular-shaped block bordered by Fulton Street, DeKalb Avenue, and Flatbush Avenue. All three are well-known, prime Brooklyn thoroughfares, thus making the block one of the best-located in the borough. With the latest deal, RedSky now owns 11 of the 16 buildings on the site. Because no plans have been filed at this time, it appears that RedSky seeks to acquire the remaining 5 parcels to enable a larger development which would comprise the entire block.
