Brooklyn investment sales up, as demand for development sites and industrial properties jumps

New York /
Jul.July 30, 2013 03:00 PM

The investment sales market in Brooklyn was lively in the first half of the year, mimicking the robust environment in Manhattan, according to the second quarter sales report for the borough from commercial brokerage TerraCRG, provided to The Real Deal today. Building sales in the borough totaled $1.8 billion so far this year, up 46 percent from $1.2 billion in the first half of 2012.Development sites saw the largest jump in dollar volume of assets traded of any property type, with sales up 84 percent year-over-year to more than $344 million from $187 million, the report shows.

“Because of tight inventory, there is pricing pressure,” Ofer Cohen, founder and president of TerraCRG, told TRD.

He said he believes the price per square foot for development sites in Brooklyn has doubled in the last year, but exact figures on that metric were not available. The borough of Kings currently has historically low housing inventory, as TRD has reported.

The most active area tracked by TerraCRG’s report was the Downtown Brooklyn/Park Slope region, where sales of development sites totaled $212 million in the first half of the year, up more than 600 percent year-over-year from about $27 million in the first half of 2012.

While many of the development sites have traded between smaller, local players, the largest sale so far in 2013 – Manhattan-based developer TF Cornerstone’s first Brooklyn acquisition – indicates a trend for Manhattan-based, and even national, institutional players, such as real estate investment trusts, to get in on the game, Cohen said.

In April, TF Cornerstone purchased 300 Livingston Street in Downtown Brooklyn, which offers 500,000 buildable square feet, for $70 million from Thor Equities. The site is currently a parking garage, but will reportedly become apartments, though the developer has not said publicly if they will be rentals or condominiums.

An estimated 12,000 residential units are under construction in Brooklyn at the moment, Cohen said.

The other property type that saw a jump in demand in the first half of the year was perhaps more surprising: industrial sites. Sales of industrially-zoned properties shot up 61 percent, from 36 to 58 sales, with the dollar volume of such trades up 22 percent, from $88 million to $108 million year-over-year.

Some 30 percent of industrial sales was in the Greenpoint area, where Cohen said demand for creative office spaces for technology and advertising companies had bolstered prices and deal volume.

“A lot of this commercially-zoned stuff will be converted into offices, similar to what happened in Dumbo,” Cohen said. “When markets are good, people look for the next frontier.”


Related Articles

arrow_forward_ios
Clockwise from top left: 162 West 13th Street, 325 Avenue Y in Brooklyn, 1281 Viele Avenue in the Bronx (Credit: Google Maps)
Here’s what the $10M-$30M NYC investment sales market looked like last week
Here’s what the $10M-$30M NYC investment sales market looked like last week
1301 Metropolitan Avenue and 151 East 90th Street (Google Maps)
Industrial, multifamily, retail sales punctuated midsize deals last week
Industrial, multifamily, retail sales punctuated midsize deals last week
From top to bottom: 101 Cooper Street in Inwood, 781 Washington Avenue in Crown Heights and 70-35 113th Street in Forest Hills (Google Maps)
Pent-up demand? Midsize i-sales total $125M after week of zero
Pent-up demand? Midsize i-sales total $125M after week of zero
Mack-Cali Realty CEO Mahbod Nia and River Centre in Red Bank (Mack-Cali)
Mack-Cali offloads Red Bank office complex for $84M
Mack-Cali offloads Red Bank office complex for $84M
Hamed bin Zayed Al Nahyan (Getty)
Pandemic squeeze forces Abu Dhabi fund to reassess real estate exposure
Pandemic squeeze forces Abu Dhabi fund to reassess real estate exposure
1111 Fannin Street, Houston (Google Maps, iStock)
Harris County set to buy downtown Houston office building for close to $29M
Harris County set to buy downtown Houston office building for close to $29M
546 Broadway and Isaac Chetrit (Google Maps)
Uniqlo finalizes $160M buy of its flagship at 546 Broadway
Uniqlo finalizes $160M buy of its flagship at 546 Broadway
688 and 702 Court Street, Brooklyn with Madison Capital managing partner Richard Wagman (Google Maps, Madison Capital)
Madison Capital snatches up Red Hook industrial sites for $45M
Madison Capital snatches up Red Hook industrial sites for $45M
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...