2024 EOY Brooklyn Multifamily, Mixed-Use/Retail, and Industrial Market Report
Multifamily Market Summary
The Brooklyn Multifamily market saw ~$972M of sales volume across 195 separate transactions in 2024. Additionally, there were a few themes that were tracked:
Flight Quality
There was ~$570M of sales volume in the “Prime Markets” of Greater Downtown and North Brooklyn. In a higher rate environment, investors flocked to the best neighborhoods.
Capitalization Rate Expansion
Cap rates increased by an average of 21 basis points quarter over quarter in 2024, with the pace accelerating as the year progressed. Moreover, this upward trend was driven primarily by rising interest rates and the Fed’s reluctance to pivot, as well as concerns over HSTPA and other potentially harmful legislation in the pipeline.
- Q1: 6.47%
- Q2: 6.57%
- Q3: 6.75%
- Q4: 7.09%
Smaller Equity Checks
Focus on smaller tax product has been a theme of the market since the passage of HSTPA in 2019, wherein upside in larger buildings was effectively eliminated, while taxes, insurance and operating expenses continue to rise. As a result, buildings with 10 units in the protected 2A/2B tax classes made up just over 70% of transaction volume this year.
There were mixed signals with dollar and transaction volume throughout 2024. However, Q2 saw the highest dollar volume and lowest transaction volume, with 67% of buildings sold comprised of ten units or fewer and an average deal size of $7.1M. In contrast, Q4 saw the lowest dollar volume and the highest transaction volume, with 86% of buildings sold comprised of ten units or fewer and an average deal size of $2.7M.
Multifamily Transactions
- Total Sales Volume: $972,035,631
- Avg. Price per Unit: $355,964.62
- Average Price per SF: $442
- Transactions: 195
- Avg. Cap Rate: 6.72%
Mixed-Use & Retail Summary
The second half of 2024 witnessed a significant uptick in transaction volume and overall sales dollar volume compared to the first half of the year. Sales activity rose sharply, increasing from 183 to 240 transactions—a 31.5% growth. Similarly, the total dollar volume soared from $498 million to $1.61 billion, reflecting an impressive 133% increase.
This surge was primarily fueled by a retail buying frenzy in Williamsburg and Greenpoint, which accounted for 47 transactions totaling $398 million. These neighborhoods also demonstrated premium pricing, achieving an average of $1,135 per square foot (PSF), significantly higher than Brooklyn’s overall average of $565 PSF. This trend underscores a recurring theme in both NYC and Brooklyn’s commercial real estate markets: an investor flight to quality.
Brooklyn’s retail and mixed-use markets are showing strong signs of recovery despite persistent capital market challenges and higher-than-expected interest rates. In total, Brooklyn recorded 420 transactions in 2024, generating an aggregate sales volume of$1.659 billion. These figures highlight the resilience of the borough’s retail sector as it navigates a shifting economic landscape.
Mixed-Use & Retail Transactions
- Transactions: 423
- Price per SF: $646
- Total Volume: $1,659,093,978
Brooklyn Industrial Market Overview
Brooklyn’s industrial market continues to showcase resilience, with user buyers leading the way and institutional deals returning. With this momentum, it’s anticipated that 2025 will be a banner year.
- Total Dollar Volume: $927M—an 83% increase from 2023 and a 14% increase from 2022.
- Transactions: 102 deals over $1M, up from 61 in 2023 and 101 in 2022.
- Average Price per SF: Warehouses traded at $488 per SF, up from $445 in 2023.
- Average Deal Size: $9.5M.
- Buyer Trends: 70% of transactions were user-buyers, with 58% of these being first-time buyers!
- Top Neighborhoods by Transaction Volume: Williamsburg (21), Sunset Park(10), Greenpoint (10).
- Q4 Strength: 54% of the total dollar volume was recorded in Q4, capped off by the year’s largest deal—the sale of a warehouse leased by Amazon at 280 Richards Street in Red Hook for $156,250,000.
