This 95,000-square-foot warehouse at 77 Commercial Street was acquired for $25,000,000 by the Chetrit Group with the intent of converting it into a residential site

Greenpoint’s Commercial Real Estate Market Driven by Industrial and Multifamily Sales in 2012

Driven largely by robust industrial and multifamily sales, 2012 was a good year for commercial real estate in Greenpoint, according to research from our firm’s Brooklyn 2012 Year-End Sales Report.
In total, Greenpoint saw 34 transactions comprised of 40 properties with a total dollar volume of $116 million. Of these deals, industrial and multifamily assets accounted for more than 75% of the total dollar volume.

Industrial sales in Greenpoint have been strong in recent years because of the abundance of vacant warehouses and factories in the area. In total, 2012 saw 9 industrial transactions comprised of 10 properties totaling $45 million in dollar volume. Sales of this asset class represented 39% of the total dollar volume for the neighborhood in 2012.

The large share of industrial dollar volume can be attributed to the sale of 77 Commercial Street, which traded in April for $25,000,000. The property, a 95,000 square-foot warehouse, was acquired by the Chetrit Group with the intent of converting it into a residential site, a plan made possible by the city’s 2005 rezoning initiative.

The multifamily market in Greenpoint was equally solid and not as dependent on such an unusually large deal. In 2012, Greenpoint saw 18 properties trade for a total transaction volume of $44 million. This represented 38% of total dollar volume and nearly half of the number of traded properties in the neighborhood last year.

The average price per square foot for multifamily properties stood at $364 in 2012 and the average price per unit was just over $300,000. These are both above their respective averages for the rest of the borough, showing a strong market in the neighborhood compared to all of Brooklyn.

The average cap rate for multifamily buildings in Greenpoint was 7.2%, which was slightly higher than the average for the entire borough, which stood at 6.95%. The average GRM stood at 9.98, compared to 9.26 for all of Brooklyn. Both of these suggest that investors view the market as just slightly riskier than some of the borough’s hotter locations (e.g. Downtown or Boerum Hill) and seek a higher return because of it.

The multifamily market showed some notable transactions, including 763 Manhattan Avenue, which traded at $8,500,000, and 680 Manhattan Avenue, which sold for $7,100,000, both of which further confirm the sentiment that Manhattan Avenue is hottest corridor for real estate in the neighborhood.

Though not as impressive as industrial or multifamily sales, Greenpoint had 5 development transactions comprised of 9 properties totaling $22 million in dollar volume. This represented 19% of dollar volume and 23% of properties sold in the neighborhood in 2012.

The most notable development transaction in 2012 was the sale of 239 Banker Street, a vacant building that sold for $9.1 million in May, making it the second largest transaction in the neighborhood in 2012. The 17,100 square-foot building, known as the Sweater Factory Lofts, has been the target of controversy.
In brief, the real estate market in Greenpoint showed encouraging signs in 2012, including high prices per square foot and per unit, and a small number of large transactions that carried the dollar volume to impressive levels. Due to the large stock of factories and warehouses, industrial sales carried the greatest share, followed by multifamily buildings, something that was reflected in Williamsburg as well. In total, 2012 was a good year for Greenpoint, and we look forward to a healthy 2013 as well.

For a copy of the Brooklyn 2012 Year-End Sales Report, please see http://arielpa.com/newsroom/report-APA-Brooklyn-2012-Sales-Report.

Brett Campbell, Sales Associate, contributed to this article.

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