NEW YORK CITY-With its coolness factor rising daily and the buzz on its residential areas soaring, Brooklyn's CRE market apparently has caught up. Investment sales in the borough of kings hit a staggering $4 billion last year, marking a 106% year-over-year jump from 2011, according to Ariel Property Advisors' Brooklyn 2012 year-end sales report, released Monday.
Sitting pretty as the place to live, residents or wanna-be-residents sent pricing in the multi-family segment into the upper reaches, says Jonathan Berman, Ariel VP, in the research announcement. “Multifamily properties in prime Brooklyn locations are quickly catching up to Manhattan prices and a slew of institutional level sales saw prices approaching $1,000 per square foot,” he says. “This is a sign that investors not only believe in the strength of the rental market, but can see these buildings as lucrative conversion opportunities in the future.”
Development site sales picked up in rapidly growing areas such as Bushwick, Bedford-Stuyvesant, Crown Heights, Downtown Brooklyn, Clinton Hill, and Williamsburg, the report notes. And tenants are prompting spikes both in rentals and planned condominiums, a trend that's expected to continue. Brooklyn transactions rose to 586 up from 388 in 2011, a 51% increase; while the number of buildings traded rose to 799 up from 585 in 2011, a 37% increase.
One of the most significant assets to change hands was the former Domino Sugar Factory which—as previously reported—was sold to Two Trees Management for $185 million. Plans for the property have changed from early reports to include office space for as many as 3,000 to 4,000 workers, it was reported Sunday in the Wall Street Journal.
On the development front, another big change was the greatly anticipated opening of Barclays Center, on Atlantic Avenue. Some other happenings that were slightly less publicized yet still were significant included the debut of the first phase of City Point, a retail and entertainment complex in Downtown Brooklyn; progress made on Brooklyn Bridge Park and the selection of a development team to build a hotel and residential complex on the waterfront.
New York City's economic recovery, combined with Brooklyn's of-the-moment position, appear likely to drive continued growth in the borough, according to Berman.
“While strengthening economic fundamentals are playing a major part in the real estate recovery throughout the city, Brooklyn's recovery appears to be gaining even more momentum because of the area's growing appeal to residents and because of several major developments underway,” he says in the press release on the report. For a copy of the Brooklyn 2012 Year-End Sales Report, click here.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
