Office deals in Brooklyn rise, while multifamily sees fewer property trades  

Total investment sales in the borough dropped 19 percent in 2017

New York /
Feb.February 02, 2018 08:00 AM

While multifamily and land sales in Brooklyn fell last year, office investment quintupled.

Office deals in the borough totaled $757 million in 2017, up 553 percent from 2016, according to a recent report from Ariel Property Advisors. The two deals that drove that volume were CIM Group’s $171 million buy of SL Green Realty’s 16 Court Square, and RFR Realty and Kushner Companies’ $408 million acquisition of a stake in the Dumbo Heights office portfolio.

On the whole, the office sector — which accounted for 12 percent of Brooklyn investment dollars — was not enough to tip the scales for the borough. The dollar volume of deals was down 19 percent from the previous year, totaling $6.37 billion. With 1,111 deals, the average trade was $5.7 million, down from $5.9 million in 2016.

Meanwhile, multifamily sales amounted to $2.72 billion, a 35 percent decline from the previous year and 40 percent dip from 2015. Dollar volume for development and industrial sites fell 30 percent to $2.18 billion.

Pricing for those two asset classes also slipped for the first time since 2012. Land prices decreased to $248 per buildable square foot from $262, a return to 2015 levels, and price per multifamily unit slipped to $316,000 from $326,000. However, the price per square foot in multifamily deals rose to $388 from $376.

On the positive, special purpose deals saw gains thanks to increased investment from the medical and education sectors. And two areas of uncertainty for investors were resolved in 2017: the reinstatement of the 421a subsidy and tax reform, which could be a boon for commercial real estate buyers.


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