Scorecard: The small building market is much bigger than you might think

A monthly roundup of data and reports on the commercial market

From the December issue: The total sales dollar volume in Brooklyn and Queens for small residential buildings — which has surged in the last five years — has seen its slowest quarter since 2013.

In 2012’s first quarter, the combined dollar volume for both boroughs was under $250 million. In 2016’s second quarter, it hit a high of more than $650 million but then dropped to around $475 million in the third quarter.

At the same time, the average price per unit more than doubled to $347,886 in the third quarter, from $153,898 at the start of 2012, a TRD analysis of city records showed.

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“The owners [became] clued in that there is a new breed of buyer targeting the market,” said Adam Hess, a broker with TerraCRG, which according to CoStar Group handles a large number of small-building deals.

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Marcus & Millichap’s [TRDataCustom] Shaun Riney, who is also active in the property type, said not all buildings are attracting the same level of buyer interest.

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“Right now, the only assets that are really appreciating are fully vacant or fully free-market,” he said.

Hess, however, said he expects the market to pick up as smaller owners bundle their properties together for sale.

“A lot of owners realize they can extract a premium by packaging them together,” he said.