Brooklyn’s decadelong real-estate investment boom is over.
The borough once attracted developers and speculators from across the globe looking to profit from an influx of high-income residents. But amid stricter rent regulations on some apartments and a glut of new construction, buyers are starting to look elsewhere.
The dollar volume of commercial property sales fell by 30% last year to $5.1 billion, according to brokerage firm TerraCRG, the steepest drop since the financial crisis. The decline was driven by a slump in the market for rental-apartment buildings, which tend to account for the largest portion of real-estate sales in Brooklyn.
The dollar volume of apartment-building sales fell by 56% last year to $1.1 billion, according to TerraCRG, but sales of office and industrial buildings barely changed. Overall commercial real-estate sales volume in 2019 was still higher than it had been between 2010 and 2012. “If we were in a real recession, it would be much worse. We are still in correction territory,” said TerraCRG Chief Executive Ofer Cohen.
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