Crown Heights is now the most sought after Brooklyn neighborhood for multifamily investment
Crown Heights has surpassed Flatbush as the Brooklyn neighborhood with the highest number of multifamily transactions and the demand is pushing up prices for apartment buildings in the area.
The average price per square foot for multifamily buildings sold in Crown Heights increased 20 percent to $166 and the average price per unit jumped 36 percent to $136,497 in the six months ended March 2014 compared to the same period last year, Ariel Property Advisors’ Multifamily Quarter in Review: New York City Q1 2014 shows. While multifamily transactions in Crown Heights remained relatively stable—17 transactions in the six months ended March 2014 compared with 16 for the same six-months ended 2013—the dollar volume of those trades spiked 249 percent to more than $87 million.
Investors are buying buildings in Crown Heights for a 4.5 percent or 5 percent return that previously traded for a 6 percent or 7 percent cap rate, with properties closer to Prospect Heights trading for more than those at the eastern end of the neighborhood. Prices also are rising for development sites, which are selling at a brisk pace.