The Brooklyn investment sales market is back, according to a new report from TerraCRG.
The Brooklyn commercial real estate-focused brokerage just released its 2024 Brooklyn Market Report, which found that the borough closed $7.8 billion in sales in 2024, an increase of 51 percent in total dollar volume from 2023. Total volume hit 1,198 transactions, a 12 percent increase over the previous year.
Dan Marks, CEO of TerraCRG, told CO that $7.8 billion represented the third-highest Brooklyn transaction dollar volume recorded for a calendar year since his firm began tracking metrics in 2010. Moreover, while the average transaction size of $6.5 million was the highest average ever recorded in the Brooklyn submarket, the nearly 1,200 transactions is more indicative of the revived market fortunes, Marks said.
“Dollar volume captures the attention and most of the headlines, but the better indication is the number of transactions,” he explained. “We’re seeing a 12 percent annual increase, and we expect to see even more transactions going into 2025. And with more transactions, we’ll see a push into higher sales volume numbers.”
At its peak, Brooklyn recorded just over 1,700 transactions in 2014 and 2015, and just under 1,500 transactions in 2022. During the COVID upheaval, the borough hit a low of 790 transactions in 2020, per TerraCRG data.
When asked why Brooklyn rebounded so dramatically in 2024, Marks deadpanned, “It was time.” Yet, he added that several external political and economic factors allowed the borough to increase volumes over the last 12 months. First, lawmakers in Albany included the 485x tax abatement into the state budget, which Marks said “opened the door for residential development to happen again” in New York City.
The fourth quarter of 2024 saw Brooklyn reach a 209 percent increase in total dollar volume versus the first quarter of the year, with transaction volume increasing 22 percent from Q1 to Q4, per TerraCRG
Marks said that as the year wore on, Albany defined good cause eviction more clearly, which allowed developers in the multifamily and mixed-use space to have confidence in how they underwrite their deals and price properties. Also, the Federal Reserve issued three interest rate cuts in the final quarter of 2024, and New York City passed its ambitious “City of Yes” housing reform, further fueling the desire of brokers to move properties in Brooklyn.
“People were anticipating those changes, and we also got past some very contentious elections at the federal and local level,” Marks said. “All of those things create an environment in 2024 where people had more confidence and more transactions were happening.”
The investment sales volume spanned asset classes.
Linden Plaza — a 1,525-unit multifamily complex in East New York — traded for $845 million at the end of the year, while The Brooklyn Tower — a new 74-story mixed-use skyscraper in Downtown Brooklyn — sold for $672 million in July.
Other notable deals in 2024 included multifamily 540 Fulton Street selling for $235.4 million, mixed-use 80 DeKalb Avenue selling for $202 million, and an industrial facility at 410 Kingsland Avenue selling for $120 million in a deal brokered by TerraGRG.
“It’s a mix of asset classes, one asset class doesn’t just dominate, and it runs the gamut of interest from the institutional side of the market,” explained Marks. “This market has always been a small-to-midsize market, however the average deal size in Brooklyn is as high as it’s ever been at $6.5 million.”
The loot was spread around the different Brooklyn geographies. Downtown Brooklyn secured $2.7 billion in deal volume, East Williamsburg captured $1.6 billion, and East New York grabbed $1.1 billion, while Brooklyn’s other four regions closed approximately $2.4 billion in deals, collectively.
“The story here is that a lot of good news is coming out of the Brooklyn market in 2024, and the expectation and projection is 2025 will continue on that trend of higher transaction volume, and lots of deals of many different sizes,” said Marks. “We’re expecting a robust 2025 and perhaps beyond.”
Brian Pascus can be reached at [email protected]
