Even in an uncertain economy, the Brooklyn real estate market keeps rolling.\u00a0<\/p>\n
A new report from TerraCRG<\/a> found that the dollar volume of commercial real estate transactions in Brooklyn in the third quarter of 2025 rose by 11 percent to $1.8 billion compared to the second quarter of the year, and increased by 15 percent year-over-year compared to the third quarter of 2024.\u00a0\u00a0<\/p>\n SEE ALSO: J.P. Morgan is Making an Impact on Minnesota Housing<\/a><\/p>\n All told, the borough of Brooklyn saw\u00a0 887 CRE transactions through the third quarter of 2025, totaling $4.7 billion. Transaction count was up 2 percent compared to the first three quarters of 2024, but total dollar volume was down 3 percent, indicating values have dropped over the last 10 months.<\/p>\n Dan Marks, CEO of TerraCRG, said the investment activity across the borough is \u201cmore of the same\u201d and that 2025 is expected to end within the annual average of 1,100 to 1,200 transactions and between $6 billion and $7 billion of transaction volume that Brooklyn has seen since 2015.\u00a0<\/p>\n \u201cThey are almost exactly on par with the average over the last decade,\u201d he said. \u201cThe ebbs in the flows quarter over quarter are hard to predict, but what we can say definitively, from this time last year, we\u2019re on par from dollar volume and transaction volume.\u201d\u00a0<\/p>\n From the third quarter of 2024 to the third quarter of 2025, Brooklyn has averaged $1.87 billion worth of investment activity per quarter. An outlier came in the fourth quarter of 2024, when back-to-back interest rate cuts by the Federal Reserve juiced end-of-the-year sales activity to reach 355 transactions and $3.05 billion in deals.\u00a0<\/p>\n \u201cThose are the broad metrics that indicate a stable or healthy Brooklyn CRE market, and we\u2019re right there,\u201d said Marks. \u201cWe\u2019re there because we\u2019re five years past the pandemic, six years since 2019 [New York State] rent laws, over a year into 485x [tax abatement], and [Mayor Eric Adams\u2019s] City of Yes is almost a year old.\u201d\u00a0<\/p>\n Marks added that state and city tax policies in New York along with an \u201cextremely flat\u201d interest rate environment has made the market accustomed to current conditions. He said the hope among Brooklyn market participants is that the Federal Reserve will continue to cut short-term interest rates, as Fed Chairman Jerome Powell has indicated following his rate cut earlier this autumn.\u00a0<\/p>\n \u201cPerhaps a third rate cut for the year in December will continue to free up capital and encourage investors to bridge the bid-ask gap between buyers and sellers,\u201d said Marks. \u201cBut broadly speaking, we\u2019re in a pretty good place.\u201d\u00a0<\/p>\n Brooklyn\u2019s multifamily sector has performed the strongest through the first three quarters, led by a 62 percent increase in year-over-year dollar volume. But Marks poured a little cold water on those numbers by highlighting how the borough\u2019s multifamily trades through the third quarter were juiced by the sale<\/a> of 240 Willoughby Street in Fort Green for $209.5 million in July, and the trade <\/a>of 395 Leonard Street in Williamsburg for $127 million in January.\u00a0<\/p>\n \u201cThose two deals alone put a lot of weight on that dollar volume number,\u201d said Marks.\u00a0<\/p>\n \u201cIf you remove the two outliers, we still show a good growth of 10 percent increase in [year-over-year] dollar volume, but it\u2019s not 62 percent.\u201d\u00a0<\/p>\n Conversely, Brooklyn\u2019s industrial market declined by 50 percent year-over-year in total dollar volume, a drop that Marks blamed on a lack of new supply after the go-go years the asset class experienced from 2019 to 2023.\u00a0<\/p>\n He noted that Brooklyn\u2019s industrial market saw $300 million of sales alone last December, and that most large sites have already been acquired or developed, leaving little left for 2025 participants.\u00a0<\/p>\n \u201cThese stats don\u2019t reflect the demand of the asset class,\u201d he said. \u201cIt\u2019s a supply issue, not a demand issue. Pricing has held firm in this asset class.\u201d\u00a0\u00a0<\/p>\n