NEW YORK, NY – January 23, 2026 – Brooklyn closed 2025 with $6.66 billion in total commercial real estate sales across 951 transactions, reflecting an 8% decline in dollar volume and 2% increase in transactions compared to 2024, but 28% and 12% growth over 2023, respectively, according to Ariel Property Advisors’ Brooklyn 2025 Year-End Commercial Real Estate Trends report.

“While overall investment sales moderated, the main storyline for 2025 is how Brooklyn’s development market continued to boom, surging to $1.82 billion in sales and 172 transactions,” said Ariel Partner Sean R. Kelly, Esq. “City initiatives such as the 485x tax abatement and City of Yes that focused on creating new housing, particularly through rezonings and affordable housing programs, have been significant demand drivers.”

Ariel Director Stephen Vorvolakos added, “On the multifamily side, free-market properties continued to lead transaction activity, with sales primarily driven by all-cash buyers and investors pursuing low-basis, long-term hold strategies, reflecting a sustained preference for stable, income-generating assets.”

Associate Director Nicole Daniggelis continued, “Smaller free market multifamily assets protected by tax-class designations and exempt from rent stabilization were particularly desirable last year, accounting for nearly 50% of the borough’s total transaction volume.”

Multifamily Highlights

      • Dollar volume in Brooklyn dipped 3% year over year to $3.47 billion while transactions rose 7% to 582.
      • The constrained housing supply continued to exert upward pressure on rents. Vacancy across free-market units remains low, and Brooklyn’s median rent increased 8.7% year over year to $3,804 per month, according to a November report by Douglas Elliman.
      • Brooklyn’s average cap rate continued to rise, reaching 6.96% in 2025, marking the third consecutive year of increases and the highest level since 2012. Elevated interest rates, NYC regulatory pressures (including HSTPA and Good Cause Eviction), and uncertainty surrounding the mayoral election weighed on the market.
      • For the second consecutive year, Bedford-Stuyvesant led the borough in sales, representing approximately 10% of all multifamily transactions.

Development Highlights

      • The development market rallied in 2025 with 172 transactions totaling $1.8 billion, increasing by 25% and 41%, respectively, compared to 2024.
      • Williamsburg led the market with 20 transactions. Developers there focused on speed and liquidity, targeting sites that cater to the neighborhood’s established demand for high-end luxury rentals and boutique condos.
      • Brooklyn Heights led in dollar volume with $260 million across only four transactions, including the $140.5 million sale of 205 Montague Street and $100 million sale of 98 Montague Street (Hotel Bossert), highlighting the scarcity and premium value of land in the Heights.
      • Crown Heights emerged as a surprise performer by ranking third in total dollar volume with $126 million in sales largely driven by two institutional grade sales totaling $87 million–962-972 Franklin Avenue (the former Spice Factory site), and 73 Empire Boulevard, which successfully navigated the ULURP (Uniform Land Use Review procedure) process.

Retail Highlights

      • Retail saw 76 transactions totaling $523 million, representing decreases of 10% and 17%, respectively, compared to 2024. However, by removing one $143 million outlier sale in 2024, the retail market held relatively steady in 2025.
      • Demand for prime retail assets was reinforced by several high-profile acquisitions, including Acadia Realty Trust’s $64 million acquisition of 66-70 North 6th Street and 93 North 6th Street, further expanding the firm’s Williamsburg retail footprint.
      • Dollar volume was concentrated in Williamsburg, which accounted for nearly 25% of total retail volume in 2025 despite only three transactions. Boroughwide, transaction activity was largely driven by smaller, mom-and-pop retail sales, nearly 90% of all trades.

Ind / WH / Sto Highlights

      • Brooklyn’s industrial and warehouse sector concluded 2025 with 81 transactions totaling $436 million, a sharp contraction, down 33% in volume and 62% in dollar value compared to 2024. Excluding 2020, this is the lowest level of activity since 2014.
      • A post-Covid development boom has expanded supply by 94% since mid-2022, bringing inventory to 92.2 million square feet. This influx of Class A space has created an oversupply, driving concessions in roughly 65% of all leases and pressuring deal underwriting. Consequently, investors have become hyper-selective.
      • Williamsburg led in transaction count (10), while Greenpoint topped dollar volume at $66.6 million—fueled by standout deals like 34 S 1st Street, which traded for $1,011/SF.

To read the full report, please click here.