New Billyburg apt building fetches $40M
02.05.2014 | Crain's

New Billyburg apt building fetches $40M

The real estate investment firms East End Capital and KBS are buying a recently-built residential building in hipster heaven—Williamsburg. East End, which was founded by Jonathon Yormak and David Peretz; and KBS, a Newport Beach, California-based property investment firm, have acquired 424 Bedford Ave., at the southern edge of the Brooklyn neighborhood. That’s where many of its trendiest restaurants have opened in recent years and is near the old Domino Sugar Plant, which is going through city approvals for a massive makeover into a residential/office/retail complex. Peter Luger Steakhouse, a long-time neighborhood institution, is just around the corner.

East End and KBS said they paid $39.75 million for the 66-unit rental building, just south of the Williamsburg Bridge near the corner of South 8th Street and Bedford Avenue. The partnership acquired the building from developer Michael Zazza, who finished the 20-story property in 2010 during the depths of the downturn. Mr. Zazza had originally planned to sell the units as condos but abandoned that plan and rented them out instead because of the recession. East End said it will continue to operate the property as a rental building. Down the road, however, the owners may convert the building to condominiums as real estate in that part of Williamsburg continues to rise in value.

“424 Bedford is poised to benefit from the continued expansion of Williamsburg to the south,” said Jonathon Yormak, co-founder of East End Capital.

His company has acquired several office properties in the city in recent years and more recently has entered the residential side of the business. Over the summer, the firm sold a group of three rental apartment buildings it owns on Mercer Street in Soho for $34 million, almost double what it paid for the properties in 2012.