The Brooklyn commercial market got off to a good start in the first six months of 2018, with the first increase in deal volume in over two years.
The borough saw 597 commercial deals during the first half of the year worth a total of about $4 billion, according to a report by TerraCRG. This is a roughly 44 percent increase in dollar volume compared to the first half of 2017.
The number of deals dropped by 14 percent, however, largely because of the lack of available inventory in Brooklyn, the report said.
The borough’s largest increase was in the multifamily market, which saw a 113 percent increase in dollar volume year-over-year, largely due to the massive Starrett City deal. Without including this deal, the year-over-year increase for total dollar volume was at 12 percent, and the year-over-year increase for multifamily dollar volume was at 6 percent.
The TerraCRG report had Brooklyn’s multifamily transactions dropped by 20 percent year over year, falling from 190 in 2017 to 152 this year. However, in a separate report, Ariel Property Advisors said that the borough’s multifamily transaction volume increased from 59 to 83, and its building volume increased by 4 percent, from 140 to 145. This is likelybecause TerraCRG’s report counts sales at $200,000 and up, while Ariel starts at $1 million.
“Even without the blockbuster transaction of Starrett City, we’re still seeing moderate growth,” said TerraCRG partner Dan Marks.
In Brooklyn’s retail sector, dollar volume increased by 8 percent from about $189 million to about $203 million, while transaction volume decreased by 42 percent, dropping from 64 to 37. In the industrial/office sector, dollar volume went up by 56 percent from about $292 million to $456 million, while transaction volume dropped by 20 percent from 41 to 33.
Brooklyn’s Bed-Stuy/Bushwick/Crown Heights region had the highest number of transactions at 126, while the East Brooklyn region had the highest amount of dollar volume at roughly $1.04 billion. However, this was almost entirely because of the Starrett City sale. The region was actually the lowest by transaction volume with just 58 deals.
Excluding East Brooklyn, the region of the borough with the highest dollar volume was Greater Downtown Brooklyn at about $890 million. This was a 21 percent increase from the first half of 2017, when it totaled about $733 million.
“What this is telling us is that we’re in a healthy market,” Marks said. “This is not a boom market like 2015, but it’s still very healthy and still highly transactional.”