Central Brooklyn Mixed-Use Market Report
Market Overview
Similar to many other commercial real estate sectors in 2023, the Central Brooklyn mixed-use market faced challenges and witnessed a decline across key performance indicators. Last year, Central Brooklyn recorded 45 mixed-use transactions, with a sales price at over $1,000,000, resulting in a 40% reduction in transaction volume compared to the 75 transactions in 2022. The total dollar volume for 2023 reached $81,000,000, a significant drop from the $344,000,000 recorded in 2022, reflecting a 77% decrease. It’s worth noting that the sale of 1277 E 14th Street contributed $180,000,000 to the overall sales volume in 2022.
The average price per square foot for Central Brooklyn mixed-use properties remained steady at $413, although this figure reflects a 10% decline from the peak of $461 per square foot observed in 2022.
Despite the challenges faced in 2023, we are optimistic about the outlook for 2024. Even with an overall decline in transaction velocity, mixed-use properties in Brooklyn are outperforming their multifamily and office counterparts. Mixed-use buildings with fewer than five residential units, in particular, continue to attract investors due to their free-market status and the potential to increase rents and capture upside in growing or emerging markets. As capital market interest rates normalize or even decrease over the next 24 months, we anticipate a significant increase in mixed-use transactions across the boroughs.
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