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Commercial
New York

Brooklyn investment sales cratered in first quarter

Deals nearly slashed in half year-over-year: TerraCRG

180 Remsen Street (Google Maps, Getty)
180 Remsen Street (Google Maps, Getty)

Brooklyn came off a banner year for investment sales, but there was some concern that this year would see a decline in activity 

The dollar volume of investment sales in the borough fell 49 percent year-over-year in the first quarter, according to data from TerraCRG reported by the Commercial Observer. The total is also a 47 percent drop from the previous quarter. 

The borough counted $2.07 billion in deals in the first quarter of 2022, setting the course for a $9 billion year. One year later, elevated interest rates and inflation dragged that total down to $1.05 billion in deals. 

Multifamily transactions suffered some of the biggest losses. There was $490 million in first quarter investment sales, down 43 percent year-over-year and 73 percent from the previous quarter. There were more than 100 fewer total sales in the sector year-over-year.

Industrial transactions also fell significantly as leasing in the sector slowed. The dollar volume of sales declined 65 percent year-over-year, dropping to about $81 million.

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Investment sales for retail buildings declined by 43 percent (approximately $80 million) year-over-year, while development site sales declined by 8 percent, or $25 million. Office sales actually increased from the fourth quarter — the only sector to see a gain — but fell by 85 percent year-over-year.

The quarter’s largest investment sale occurred in Brooklyn Heights, where an affiliate of Rockrose Development purchased a campus at 180 Remsen Street from St. Francis College for $160 million. It was the only deal to clear the $100 million threshold in the first quarter — it was also the only deal to clear the $50 million threshold.

Sales are likely to be hampered again in the second quarter, as the Federal Reserve raised interest rates again this week. While the Fed signaled interest rate hikes could be coming to an end soon, TerraCRG CEO Ofer Cohen doesn’t see sales suddenly surging when that happens.

“A pause is a pause. A pause is not a drop,” Cohen told the Observer. “We could be in a year of pausing before anything happens, which means that the volume is going to continue to be depressed.”

— Holden Walter-Warner

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