2024 Year End Brooklyn Multifamily Market Report
Market Summary
The Brooklyn Multifamily market saw ~$972M of sales volume across 195 separate transactions in 2024. 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. This upward trend was driven primarily by rising interest rates and the Fed’s reluctance to pivot, along with 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 2029, wherein upside in larger buildings was effectively eliminated, while taxes, insurance and operating expenses continue to rise. 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. Q2 saw the highest dollar volume and lowest transaction volume, along 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%
