Brooklyn’s commercial real estate market was busier last year than in 2019, despite the pandemic.
There were 1,198 deals worth more than $6.1 billion overall last year, respective increases of 47% and 36% compared with 2020, according to a report from TerraCRG. Both numbers also were up compared with 2019, when there were 953 deals worth $5.2 billion overall.
The real estate industry seemed to get more confident as the year went on, with 58% of deals—accounting for 70% of the total dollar volume—happening in the second half of the year. The fourth quarter was the busiest, with 387 deals worth roughly $3.2 billion, while the first quarter was the slowest, at 229 deals worth $659 million.
The last quarter of 2021 is a good indicator of what this year should look like, according to TerraCRG Chief Executive Ofer Cohen.
“The rest of 2022 is going to be very similar, in terms of velocity and volume, to the last quarter of 2021,” Cohen said.
Several large institutional sales took place in Brooklyn last year, and the top 10 deals in the borough accounted for more than 25% of the total dollar volume. There were seven deals for more than $100 million each.
The largest deal of the year was the sale of The Denizen in Bushwick for $506 million. Atlas Capital purchased it from Yoel Goldman during the fourth quarter. The second largest deal was the $220 million sale of 85 Jay St. in Dumbo, and the third was the $128 million sale of 12 Metrotech Center in Downtown Brooklyn.
The Downtown Brooklyn area, which includes Boerum Hill and Gowanus, experienced the most dollar volume, $1.7 billion, while north-central Brooklyn, which includes Bushwick and Crown Heights, had the most transactions: 220.
Mixed-use properties were the most popular by deal volume and dollar volume, with 458 deals worth about $1.8 billion overall, according to the report. Multifamily properties were second in both categories, with 287 deals worth about $1.4 billion.
Part of the reason for 2021 activity surpassing 2019 levels was that 2019 was not a particularly busy year for real estate. Activity in the Brooklyn market peaked in the mid-2010s before tapering off between 2016 and 2019, and a strict new rent law that the state Legislature passed in 2019 curtailed the amount of interest in trading multifamily properties, Cohen said.
“It was an active year,” he said of 2019, “but I would call it kind of a hangover year.”