Brooklyn Industrial Real Estate Market Remains Strong: Q2 Report

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The Brooklyn Navy Yard, a former US Navy facility, has been a business incubator, shipyard and industrial complex for many years. Eagle archive photo by Lore Croghan

According to a new report from Colliers International, a commercial real estate company with offices in 68 countries, the industrial real estate market in the city’s outlying neighborhoods, including Brooklyn, continued to show healthy improvement during the second quarter of 2022.

The report revealed that the market demonstrated sound fundamentals in the second quarter as the uptime rate continued to decline. The average asking rent for industrial space in outlying boroughs also increased by 2.5%, as demand for industrial space continued to push up asking rents. Richard Warshauer, the company’s senior managing director, called the market “robust”.

The company, following the CoStar Group, a provider of information, analytics and marketing services for the commercial real estate industry, divides Brooklyn into two “submarkets”, North Brooklyn and South Brooklyn.

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In North Brooklyn, the leasable building area (RBA) is 42,572,282 square feet, the number of buildings is 741, the availability rate is 3.9%, and the average asking rent is $27.01 per square foot. In South Brooklyn, the RBA is 27,849,718 square feet, the number of buildings was 340, the availability rate was 10.4%, and the average asking rent was $19.41 per square foot.

Areas in Brooklyn with high industrial real estate activity, Warshauer said, include Red Hook (which has always been strong in industrial real estate), East New York (where there has been a lot of new construction in recent years), and East Williamsburg, near Newtown Creek.

The Brooklyn Army Terminal seen from the Gowanus Expressway. The complex, formerly a US Army supply base, is now used for commercial and industrial purposes. Wikimedia photo by Jim Henderson

The Brooklyn Navy Yard, Brooklyn Army Terminal and Industry City, like the brooklyn Eagle has often reported, are also very active in attracting and retaining and attracting industrial tenants.

The report highlights CRBE Investment Management’s acquisition of 640 Columbia Street, a multi-story logistics facility in Red Hook, as “the most notable trade of this quarter.” The 397,020 square foot warehouse was purchased for $330 million and was fully leased to Amazon at the time of the sale.

City of industry. Photo: Paul Frangipane/Brooklyn Eagle

The company also bought the Brooklyn Logistics Center, two warehouses in eastern New York, for $230 million, also leased by Amazon.

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The sales, in tandem with others in Queens and the Bronx, “underscore investor demand for fully leased warehouse products in the outer boroughs. At $585.10 per square foot, the average selling price has increased 44.1% year over year and is 54.5% above the five-year quarterly average of $378.78 per square foot,” the report said.

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