Developer Crowdfunds Because Why Not?

Brooklyn Standard Properties’ David Manheimer (whom we snapped yesterday over coffee at the Mondrian SoHo) and Benji Kohn are about to close on a four-unit Williamsburg apartment building between Bedford and Berry (almost on top of the L entrance). It'll be the 18-month-old investor and developer’s third property—and all three have employed crowdfunding. Brooklyn Standard has just finished renovations on three of the eight units in Greenpoint’s 151 Dupont St and is renovating six of the eight units in Prospect Height’s 533 Bergen, which it bought 75% vacant. The company also has a six-unit Bushwick property on Jefferson Street under contract.

Benji says he and David don’t rely on crowdfunding to close deals; rather, that revenue stream supplements the company's network of private investors. The Williamsburg property will be their first acquisition with crowdsourced debt, and the offering will pay a coupon just like any debt instrument, David says. The pair focused on Brooklyn because it still offers the smaller, often mismanaged properties that leave value on the table. They don’t underwrite their deals based on projected rent growth but rather look for properties that will yield high returns after 12 to 18 months of renovations.

David and Benji went to school together from preschool through high school and both ended up on Wall Street before launching Brooklyn Standard. Benji tells us he quit Bear Stearns a month before it went under and produced 10 indie movies in five years, including 2010 Sundance Audience Award winner HappyThankYouMorePlease (written, directed, and starring How I Met Your Mother’s Josh Radnor) and Infinitely Polar Bear (starring Mark Ruffalo and Zoe Saldana), which Sony Pictures Classics has picked up and will release in theaters next March or April.