The Brooklyn multifamily market took at second quarter hit as the new rent regulations sent sales tumbling.
Multifamily sales volume fell by 55 percent while a bouyant industrial and office sector helped the overal sales consideration hold at $2.7 billion for the first half of the year.
“The decline in volume is clearly focused solely on the rent-stabilized Multifamily segment,” said Ofer Cohen, Founder & CEO of TerraCRG, whose annual half year Brooklyn market report found a 32 percent decrease in dollar volume this year compared to last.
Cohen added, “Other asset classes in Brooklyn continue to show strength — volume of Industrial/Office asset trades showed a 30% increase and Residential Development sites remained steady.”
The multifamily market, while showing a still robust dollar volume at $771 million, saw a 55 percent volume decrease from the previous year, while mixed-use properties showed a volume decrease of 19 percent for a consideration of $511 million.
The total number of transactions decreased by 17 percent when comparing the first halves of 2018 and 2019, a 51 percent decrease from 2015 — a record peak year in the Brooklyn commercial real estate market.
The Industrial/Office market is the only asset class that experienced an inclined dollar volume in the first half of the year, with a 30 percent dollar volume increase since 2018.
Retail was the only asset class to see growth in transactional volume, with an 11 percent increase.
Furthermore, the North Brooklyn region had the highest dollar volume across the multifamily, mixed-use and special asset classes, as well as the highest total dollar volume across the borough for a total consideration of ~$607M. The Greater Downtown Brooklyn region saw the highest dollar volume for development three years running.
The largest transactions in the first half of 2019 were Sunset Park Industrial Park sold for $255 million, Leonard Pointe (395 Leonard Street) in Williamsburg for $130 million and 564 St. Johns Place in Crown Heights for $117 million.