Brooklyn i-sales see biggest drop since financial crisis

Dollar volume dipped by 30% last year

New York /
Jan.January 21, 2020 08:46 AM
Investment sale dollar volume in Brooklyn fell 30% in 2019, the biggest drop since the financial crisis. (Credit: iStock)

Investment sale dollar volume in Brooklyn fell 30% in 2019, the biggest drop since the financial crisis. (Credit: iStock)

Brooklyn’s multifamily-heavy investment sales market had a tough year in 2019, thanks to new rent laws and new development.

The total dollar volume of commercial property sales in the borough declined by more than 30 percent year over year to $5.1 billion, the Wall Street Journal reported, citing data from TerraCRG. This was the largest decline since the financial crisis, and was driven by a 56-percent drop in apartment-building sales.

“We are going to see a lot of distress in the rent-regulated multifamily market,” Slate Property Group’s David Schwartz told the Journal.

According to brokers, the value of rent-regulated apartment buildings has fallen by a quarter on average since Gov. Andrew Cuomo signed in the new rent law in June. Meanwhile, the volume of office and industrial property sales remained close to previous years.

Slower rent growth caused by a glut of new apartment construction has also played a role in reducing investor appetites. In the long term, the limited supply of market-rate units could boost rents at such properties.

The gentrification resulting from Brooklyn’s decade-long investment boom, driven by developers and investors the world over, has long been a hot topic in local politics. On Monday, Brooklyn Borough President Eric Adams attracted controversy by singling out Midwesterners for driving gentrification.

Go back to Iowa, you go back to Ohio,” he said during a speech in Harlem on the occasion of the Martin Luther King Jr. national holiday, the New York Post reported. Adams is the leading fundraiser in the 2021 mayoral race and has received major campaign contributions from the real estate industry.

“The mayor doesn’t agree with how it was said, but the Borough President voiced a very real frustration,” a spokesperson for Mayor Bill de Blasio told the Post. [WSJ] — Kevin Sun


Related Articles

arrow_forward_ios
Blackstone CEO Steven Schwartzman and Stuyvesant Town (Credit: Getty Images)
After authorities vowed review of Stuy Town deal, Blackstone changes course on vacancies
After authorities vowed review of Stuy Town deal, Blackstone changes course on vacancies
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
Tete-à-tete with TRD: How landlords are dealing with New York’s new rent laws
Tete-à-tete with TRD: How landlords are dealing with New York’s new rent laws
Tete-à-tete with TRD: How landlords are dealing with New York’s new rent laws
(IStock illustration by Kevin Rebong)
Smaller cities look to cash in on shift to remote work
Smaller cities look to cash in on shift to remote work
Canada, South Korea, Germany, Singapore, and the UK top the list of countries investing in real estate. (Getty)
South Korea now No. 2 foreign investor in US CRE
South Korea now No. 2 foreign investor in US CRE
(iStock/Illustration by Kevin Rebong for The Real Deal)
Year from Hell: 80% of Brooklyn businesses saw revenue drop
Year from Hell: 80% of Brooklyn businesses saw revenue drop
A photo illustration of the 960 Franklin Avenue rendering with Continuum Company's Bruce Eichner (iStock, 960 Franklin/Illustration by Kevin Rebong for The Real Deal)
Apartment project near Brooklyn Botanic Garden is shortened
Apartment project near Brooklyn Botanic Garden is shortened
330 Sackett Street and 72 Hicks Street (Compass, iStock)
Townhouses dominated Brooklyn luxury contracts — again
Townhouses dominated Brooklyn luxury contracts — again
arrow_forward_ios

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

Loading...