Brooklyn's Real Estate Market Shows Resilience with $3.25 Billion in Investment Sales in 1H 2025

Brooklyn's commercial real estate market has shown notable resilience in the first half of 2025, with investment sales totaling $3.25 billion across 453 transactions, according to Ariel Property Advisors' mid-year report. This performance marks a modest 4% increase in transaction volume and a slight 2% decline in dollar volume compared to the same period in 2024, underscoring the borough's enduring appeal to investors despite broader economic uncertainties.

The multifamily sector emerged as a standout, with transaction volume up 10% and dollar volume climbing 14% to over $2 billion. Investors are increasingly targeting smaller, free-market buildings to navigate around rent stabilization regulations, a strategy underscored by the sale of 395 Leonard Street for $127.5 million. Development land values reached a record high of $313 per buildable square foot, fueled by initiatives like the City of Yes and the 485X tax abatement, signaling strong confidence in Brooklyn's growth potential.

While the industrial market experienced a slowdown, with a 21% drop in transactions and a 51% decrease in dollar volume, the retail sector saw a 16% surge in sales, driven by institutional investments in prime locations such as Williamsburg. The average retail price per square foot rose to $762, on track to surpass the previous record set in 2024.

This report highlights the strategic shifts in Brooklyn's real estate market, with investors adapting to regulatory changes and focusing on sectors with the highest growth potential. The data not only reflects the borough's dynamic market conditions but also its critical role in addressing New York City's housing shortage through targeted development initiatives.