Below is an overview of the Brooklyn multifamily, industrial, and mixed-use/retail markets in H1 2025, along with a few key insights.

Multifamily

Market Overview

• In the first half of 2025, Brooklyn multifamily saw $840M in total dollar volume across 223 transactions.
• Free market assets are trading at nearly double the price per foot and at cap rates nearly 100 basis points lower than comparable buildings that are subject to regulation.
• This growing divergence in value metrics can be attributed in part to elevated interest rates holding firm and rising expenses (namely taxes and insurance). When coupled with inability to raise rents to offset these expenses, general lack of upside, and risk associated with DHCR/rent compliance, pricing for regulated assets have returned to levels comparable to 2010.

 

Mixed-Use

Market Overview

• In the first half of 2025, Brooklyn mixed-use saw $488M in total dollar volume across 163 transactions.
• Similar to multifamily product, mixed-use buildings with 6+ residential units have been heavily impacted by rent regulation, with buildings under 6 units (presumably free market) trading at a 40% premium on a price per foot basis.
• When comparing cap rates, the spread between free market and stabilized assets is less than 25 basis points. This is reflective of buyers’ tendency to underwrite retail components (38% of units in this section) at a higher cap rate in order to offset risks associated with vacancy and credit loss.

 

Development

Market Overview

• In the first half of 2025, Brooklyn development saw $372M in total dollar volume across 59 transactions.
• Buyer sentiment in the development space has seen marked improvement in the first half of 2025. This can be attributed to generally increased demand for housing, coupled with city and state initiatives to encourage new development.
• City of Yes (Universal Affordability Preference – UAP) has been the primary growth driver in the Brooklyn market, allowing for increased density, eased setback requirements, relaxed height restrictions, and added zoning flexibility. Though these benefits come with added affordability requirements, many developers (particularly in less mature markets) would opt to include affordable units anyway to capitalize on state tax benefits such as 485-x.
• Contrarily, in Brooklyn’s most mature neighborhoods, most developers are choosing to build the base ZFA and take on full tax exposure to avoid rent regulation altogether.

 

Industrial

Market Overview

Below is an overview of the Brooklyn industrial market in H1 2025, along with a few key insights. This data excludes transactions under $1M and all self-storage deals.

• Total Dollar Volume: $146M —a 60% decrease from H124 and a 12% decrease from H122.
• Transactions: 35 deals over $1M, down from 50 in H124 and 41 in H123.
• Average Price per SF: Warehouses traded at $455 per SF, in line with the same periods of 24 and 23.
• Average Deal Size: $4.1M, down from $7.1M in H124.
• Buyer Trends: 80% of transactions were user-buyers, with 50% of these being first-time buyers!
• Top Neighborhoods by Transaction Volume: Borough Park (5), Sunset Park (3), Easy NY (3), Greenpoint (3).

 

Three Takeaways

1. Where Are The Deals?

Dollar and transaction volume are both in the gutter–lowest we’ve seen in four years. What’s causing it? Hard to say.

 

Tariffs? I don’t think so, most of the deals went under contract 4-6 months ago before tariffs were implemented. Economy? Although there was a stock market dip earlier this year, it was not significant enough to freeze activity like this.

 

The real issue seems to be a lack of urgency. Buyers and sellers aren’t citing tariffs or the economy—they just don’t feel pressure to act.

 

That said, the active buyers are playing it smart: moving slow, staying picky, but willing to pay a premium when a property checks all the boxes.

 

2. Smaller Deals, Bigger Premiums

$4.1M is the lowest average deal size we’ve seen in four years. From 2022 to 2024, the average was closer to $7M.

 

The trend isn’t new, it’s just more obvious now. With fewer listings on the market, user buyers are stepping up and paying big premiums for small, clean warehouses.

 

3. Hardest Deal to Sell: $10M-$20M

These “in-between” assets are stuck. They’re too big for most users—the pool of buyers with the capital and need for a property this size has shrunk since last year. At the same time, they’re too small for institutions, and the pricing rarely works on a yield basis. Sellers are still hoping a user swoops in to save the day, but in this market, that buyer is hard to find.