Brooklyn, NY Real Estate is once again proving to be resilient with year to year increases in activity in the Multi Family Housing, Commercial and Industrial sectors.
Interestingly, the trend towards small neighborhood retail in Southern Brooklyn has had a strong comeback after being hit hard during the Pandemic, as opposed to higher priced neighborhoods in Northern Brooklyn and Downtown Brooklyn. Sheepshead Bay and Borough Park led the way here. A breakdown of the sales prices reveals that of the 51 commercial transactions in Brooklyn, 70% sold for less than $5M and 45% for less than $3M.
Investment sales in Brooklyn saw a 55% increase from the 1st half of 2021 to the 1st half of 2022. According to Sean Kelly, partner at Ariel Property Advisors “ Rent and vacancy rates have not only returned to pre pandemic levels but have surpassed them”.
Institutional buyers such as corporations, funds or LLCs have been aggressively pursuing Multi Family properties in Brooklyn. The 410 total Multi family transactions in the 1st half of 2022 were the most ever recorded in Brooklyn's history. For example, Avanath Capital Management's $314.5M purchase of 2 newly constructed buildings located at 38 6th Avenue with 303 units and 535 Carleton Avenue with 297 units, both in Prospect Heights.
The dollar volume of Industrial transactions jumped dramatically in 2022 over 2021 primarily because of the sale of 640 Columbia Street in Red Hook for $332M and 554-578 Cozine Avenue in East New York for $228.5M. Both properties were fully leased to Amazon and are the 2 largest Industrial/Warehouse transactions ever recorded in Brooklyn.
67% of the Development dollar volume occurred during the 1st qt of 2022 as developers rushed to get shovels in the ground before the June 15th expiration of the 421A tax abatement. The average price per buildable square foot increased to $280, the highest level on record in Brooklyn.
Go Brooklyn!
