TerraCRG releases annual Brooklyn Market Report

Brooklyn, NY TerraCRG, one of the borough’s leading commercial real estate brokerage firms, released its annual Brooklyn Market Report, analyzing dollar and transaction volume by asset class across the borough. While the COVID-19 pandemic adversely affected the commercial real estate market overall and paused business in New York City throughout the lockdown last spring, more than $4 billion of commercial assets still exchanged hands in 2020, reflecting a 22% dollar volume decline.

“The good news is the last quarter of the year experienced a rebound in activity, accounting for 30% of last year’s total dollar volume – momentum that we believe bodes well for a stronger 2021,” said Ofer Cohen, founder and CEO of TerraCRG. “Brooklyn will continue to outpace Manhattan in the recovery. Our projections on an annualized basis forecast a 35% dollar volume increase by the end of 2021 to $5.5 billion.”

While investors demand for last-mile logistics continued to fuel industrial asset sales activity, lack of inventory caused a decline overall.

“Industrial asset sales in Brooklyn totaled $556 million in dollar volume,” said Dan Marks, partner at TerraCRG. “Sunset Park performed particularly well, with the neighborhood representing almost 40% of the total dollar volume and 16% of the transaction volume in the asset class.”

Among all asset classes, multifamily transactions had the highest dollar volume at $1.049 billion – down 8% from 2019 and yet still accounting for 25% of the year’s total dollar volume. Though activity across nearly all asset classes was down, residential development experienced an 18% increase in dollar volume to $791 million.

“In 2020, we saw developers trend toward more established neighborhoods like North Brooklyn, which saw a 154% increase in dollar value,” said Peter Matheos, TerraCRG managing director. “Additionally, the average transaction size rose by about 1/3 due to developer appetite for larger projects.”

“While retail was one of the hardest hit sectors nationally as a result of the pandemic, Brooklyn’s retail assets showed only a 2% drop in average price per square foot,” said Daniel Lebor, partner at TerraCRG.

Some of the largest transactions of 2020 were retail-focused, including Urban Edge’s purchase of the Kingswood Center in Midwood.

The full TerraCRG 2020 Brooklyn Market Report can be accessed here.