1H 2024 Brooklyn Market Report | Multifamily, Industrial, Mixed-Use
Brooklyn Multifamily
The Brooklyn Multifamily sector saw ~$565M of sales volume across 91 separate transactions in the first half of 2024. $305M of the total sales volume came from the second quarter, roughly a 15% increase compared to Q1. Any increase in dollar volume is music to a broker’s ears, but across the 91 transactions in the first half of the year, only three groups engaged in more than one deal. The average capitalization rate so far this year is 6.41%. This reflects the shallow buying pool across Brooklyn and the rest of NYC, as investors are struggling to pencil deals in this higher interest rate environment.
Brooklyn Mixed-Use & Retail
In the first half of 2024, Brooklyn’s mixed-use and retail sector experienced a total of 185 transactions, amounting to $498 million, with an average price per square foot of $617. This represents an 8.8% increase over the first half of 2023, where the average price per square foot was $565. However, in terms of sales volume, the first half of 2023 recorded 204 transactions totaling $748 million, reflecting an approximate 40% decrease year over year.
Similar to many other commercial real estate sectors in 2024, the Brooklyn mixed-use and retail market faced challenges in the first half of the year. Despite a slow start in overall sales volume, end-users and investors still find mixed-use properties very desirable due to their price points and free-market status, creating a slight uptick in sales in the second quarter. The second quarter of 2024 accounted for $258 million in sales, marking a 6% increase over Q1.
Overall, the mixed-use market in Brooklyn shows strong potential for growth, driven by the Federal Reserve’s optimistic outlook in achieving its target 2% CPI, economic improvements, and favorable market conditions. Investors and end users should be optimistic about the opportunities in the second half of 2024 and into 2025.
Brooklyn Industrial
In the first half of 2024, the Brooklyn industrial market saw a total dollar volume of approximately $354M, marking a 113% increase from the first half of 2023 and a 35% decrease from the same period in 2022. There were 50 industrial transactions exceeding $1M, up from 41 in the previous half-year. Warehouses traded at an average of $465 per square foot, a slight increase from $458 in the first half of 2023. The average deal size was $7.1M. Notably, 72% of these transactions were purchased by users, with 40% of these buyers being first-time entrants into the market!
