“It’s still very robust, healthy, huge volume for Brooklyn,” Cohen said.
According to the report, development sites and multi-family properties both saw sharp quarter-over-quarter declines. Development sales increased from approximately $267 million to $138 million, while multifamily sales increased from $879 million to $430 million.
The late 421-awhich expired on June 15, probably had the biggest impact on the drop in development sales, as real estate companies said it would be harder to build an affordable housing project without the tax relief.
“We had to buy them. We had to close in on them. You had to rush to start construction to qualify,” Cohen said. “Now that market has dropped.”
Rising interest rates could also have disrupted some transactions, Cohen added.
“If you started working on a deal and you thought the interest rate was going to be 4%, and all of a sudden it’s 6%,” he said, “that’s a big difference.”
Dollar industry deal volume also fell quarter over quarter, from $688 million to $168 million, but that was due to weak supply rather than a drop in demand, according to The report. Industry figures for the second quarter were also inflated due to the sale of a pair of Amazon distribution facilities.
Office buildings were a positive for the borough, increasing significantly in dollars and transaction volume compared to the second quarter. Two of Brooklyn’s top three deals in the third quarter were in office properties: NYU bought 3 Metrotech Center in downtown Brooklyn for $122 million and MedProperties Realty Advisors and Physicians Realty Trust bought 6010 Bay Parkway in Borough Park for $81.5 million. Commercial properties were down 46% in dollar volume and 22% in transaction volume, worth approximately $99 million in sales across 28 transactions.
Brooklyn’s biggest deal of the quarter was a mixed-use property at 80 DeKalb Ave. at Fort Greene. It sold for $190 million. Mixed-use properties had the busiest quarter by property type, with 151 transactions worth about $716 million.
Greater Downtown Brooklyn, which includes Park Slope and Boerum Hill, accounted for 39% of the borough’s total dollar volume, making it the busiest area, with about $759 million in transactions. North Central Brooklyn, which includes Bushwick and Crown Heights, was the busiest area by number of transactions, at 81, according to the report. East Brooklyn, which includes Brownsville and East New York, saw approximately $46 million in activity across 29 transactions.