Price: $3,300,000 | SF: 2,500 SF Warehouse + 7,500 SF Yard | $/Lot SF: $330

Notes: Warehouse needed work and has 13' clear. Parking lot was well maintained.

My Take: We didn't get as many offers as I thought we would on this one. I think that comes down to two reasons.

1. Red Hook. The Brooklyn industrial market is being propped up by first time buyers. Through selling this deal and marketing 150 Conover across the street, it has become clear that Red Hook isn’t a neighborhood many of them are thinking about. Low sales velocity, limited public transportation, and the lingering PTSD from Hurricane Sandy have become barriers to these premium buyers submitting an offer.

2. Too much land. Users want land, but this was a little too much. The warehouse was only 2,500 SF and majority of businesses need more than that. I know if this building was even 4,000 SF we would have seen significantly more activity.

In the end, we found a transportation company currently leasing in the area who bought the property all-cash, got comfortable with some minor environmental issues, and paid 10% more than our next highest offer.

What Came Up With Clients: First-Time Buyers

First-time buyers are saving the day, but that usually involves a lot of hand-holding with financing and environmental contingencies. If you are a seller, expect a longer time on market. It takes time to find these buyers and sometimes even longer to get them to sign a hard contract. Having a long buyer list from warehouses already on the market, exposing the property widely, and cooperating with brokers remain essential to achieving that 20-30% user premium.

A few things sellers will need to get that premium:

Open Permits and Certificate of Occupancy — Do you have any open permits or CofO issues? It is worth cleaning these up before going to market or, at minimum, having a clear plan and cost estimate for resolving them. First-time buyers and their attorneys will flag these immediately, and they can slow down or kill a deal.

Environmental — Most first-time buyers are getting financing, and most lenders will require clean environmental. If you have not done a Phase 1 already, expect your buyer to require one. If the Phase 1 flags anything, expect a Phase 2. Getting ahead of this before you go to market can save you significant time and give you more control over the process. I wrote a post about it here: Just Do The Phase 1!

Empty Warehouse — In most cases there is no need to do any work on the building itself, but removing materials and being able to show a buyer a clean, empty box can make a real difference in price and how quickly a buyer can get comfortable.

On the Market: 130-43 92nd Ave, Richmond Hill

Asking $2,200,000 ($440/SF)

Lot Size: 50’ x 100’

Building SF: 5,000 SF

Zoning: M1-1

Clear Height: 12’-14’

Drive-In Door: 1 (12’)

Delivery: Vacant

Taxes: $30,529/year

In the Borough: Defonte’s

Is there a better way to celebrate selling a warehouse in Brooklyn? I have no idea what’s in the Nicky Special, but it hits everytime!

Bobby Lawrence is a Vice President at Matthews Real Estate Investment Services, where he helps clients buy and sell industrial buildings, land, and development sites in Brooklyn and Queens. The views here are his own and don’t reflect those of Matthews.

Bobby Lawrence

Bobby.lawrence@matthews.com

(908) 616-5799

▪ Total Dollar Volume: $184M —a 21% increase from 1H25

▪ Transactions: 40 deals over $1M, up from 35 in 1H25

▪ Average Price per SF: Warehouses traded at $459 per SF, in line with the same periods of 25 and 24.

▪ Average Deal Size: $4.5M, up slightly from $4.1M in 1H25

▪ Buyer Trends: 78% of transactions were owner-user buyers. 50% of all transactions involved first-time buyers.

Top neighborhoods by transaction volume:

Sunset Park (7)

Greenwood Heights (5)

East Flatbush, East New York, Williamsburg, Gowanus (4)

Three Takeaways from the Brooklyn Industrial Market through 1H26

1. First Time Buyers Drive the Market

First-time buyers accounted for nearly 50% of the market’s volume, up significantly from 34% of in 2025. First time buyers are saving the day, but that usually involves a lot of hand-holding with financing and environmental contingencies. If you are a seller, expect a longer time on the market. It takes time to find these buyers and sometimes even longer to get them to sign a hard contract. Having a long buyer list from warehouses already on the market, exposing the property widely, and cooperating with brokers remain essential to achieve that 20-30% user premium.

2. Average Sales Price Remians low

$4.5M is a low average deal size. For context, from 2022 to 2024, the average was closer to $7M. Lack of institutional deals getting done and as I discuss below, the buyer pool is very thin for users around $10M.

3. The hardest deal to sell: $10M-$20M

These “in-between” assets are still stuck. They’re too big for most users—the pool of buyers with the capital and need for a property this size has shrunk since last year. At the same time, they’re too small for institutions, and the pricing rarely works on a yield basis. Sellers are still hoping a user swoops in to save the day, but in this market, that buyer is hard to find.

Bobby Lawrence is a Vice President at Matthews Real Estate Investment Services, where he helps clients buy and sell industrial buildings, land, and development sites in Brooklyn and Queens. The views here are his own and don’t reflect those of Matthews.

Bobby Lawrence

Robert.lawrence@matthews.com

(908) 616-5799

Price: $3,580,000 | SF: 7,500 + Small Side Yard | $/SF: $477

Notes: Single-story, 13’ clear, corner, elevated warehouse. Bought by a local owner.

My Take: This warehouse was what I like to call an “inbetweener.” The best outcomes for warehouse sellers usually come from two buyer pools — trendier users looking for locations that work for nightclubs, art galleries, or destination retail, or traditional warehouse users looking for highly functional buildings near major thoroughfares.

This property sat somewhere in the middle, functioning more like flex space. While it was located in East Williamsburg, it sat a few blocks away from the trendiest pocket. And while it was a corner property with a side yard and excellent access to major thoroughfares, its lower ceiling and lack of loading narrowed the pool of traditional warehouse buyers.

As always, the key is finding the right buyer! After multiple tours and 10 offers, we ended up selling to a local industrial owner, who paid a premium today, knowing where this pocket is headed over the next 10 years.

What Came Up With Clients: Don’t Sell, Ground Lease!

Both this administration and the last have made it clear that building more housing is a priority. The most effective way to do that is through neighborhood rezonings. We’ve seen it recently in Gowanus, Atlantic Avenue, and Jamaica where large swaths of M-zoned land became residential overnight.

These rezonings are like hitting the lottery — they usually double or triple the value of the property and leave the owner with three options besides holding it:

1. Sell — The most obvious and oftentimes the right answer as long as you feel comfortable with the 1031 exchange process.

2. Joint Venture — You put up the land, a developer builds the building, and you negotiate how to split future profits. Sounds good in theory. The problem is you become a minority partner with limited control, and everything depends on the developer executing their business plan. If they don’t, the downside is significant. I generally don’t recommend unless the owner has developed before or has an exsisting relationship with a seasoned developer.

3. Ground Lease — This is when you enter into a long-term agreement, usually 99 years, with a developer. They build on your land, you collect rent, and you still maintain ownership. Why this works for certain owners:

   1. More Value, Less Taxes — A sale triggers a capital gains event and puts you on the clock in a 1031 exchange. Exchanging a $10M+ property often into an asset class you’re not familiar with is a big ask. A ground lease avoids that entirely.

   2. Generational Wealth For Your Family — Over 99 years, the rent payments can amount to hundred of millions of dollars. Owners also often worry about passing down a headache to their kids. In this scenario, there is no ambiguity — the 99-year lease gives your family a clear roadmap and takes the guesswork out of what to do with the asset. Plus, after the 99 years, your family gets the land back with the building on it.

   3. Consistent Cash Flow, Significantly Less Risk — In a JV, if the developer defaults and the lender forecloses, your equity is wiped out. In a ground lease your land cannot be touched by the developer’s lender. If the developer defaults, you take back the land, which will most likely will be worth more because the foundation or a building will already be in place.

Ground Leases We Are Currently Working On:
956 Dean Street | 20,592 BSF | Asking Base Rent: $300K/Year
Jamaica Development Assemblage | 660,948 BSF | Asking Base Rent: $3.5M/Year
147-17 Liberty Avenue | 99,029 BSF | Asking Base Rent: $550K/Year

On the Market: 2179 Clarendon Road, Flatbush

We were just hired to sell a 10,500 SF warehouse at 2179 Clarendon Road in the Flatbush section of Brooklyn. The property has 20’ of frontage on Clarendon Road and opens to an 80’ x 100’ warehouse floor plate with 13.5’ clear height. The building also includes second-floor office space.

Asking: $2,300,000 | $219 PSF - For a business owner who doesn’t require large trucks, this is the most affordable warehouse space on the market and has residential air rights!

In the Borough: The Lawrence Team Has Grown!

14 Days ago, my wife and I welcomed Robert Appleton Lawrence IV to the world. We’re still trying to figure out his role on the team, as his main attributes are sleeping, not listening to his parents, and chugging milk, but we know he’s got potential!

Bobby Lawrence is a Vice President at Matthews Real Estate Investment Services, where he helps clients buy and sell industrial buildings, land, and development sites in Brooklyn and Queens. The views here are his own and don’t reflect those of Matthews.

Bobby Lawrence

Bobby.lawrence@matthews.com

(908) 616-5799

Price: $2,979,000 | SF: 7,000 | $/SF: $425

Notes: Single-story, 18’ clear, mortgage was assumed, one-way street. Bought by user.

My Take: This was an off-market sale and a good buy! I generally price warehouses in this area around $500/SF, so the buyer got in at an attractive basis. The building checks a lot of boxes: above average clear height, good access to major throughfares, and multiple drive-in doors. The tradeoffs are a narrow one-way street with residential buildings on both sides.

What Came Up with Clients This Month: Environmental Due Diligence Timeline and Cost

I am currently in the process of environmental due diligence on 7 warehouse/development sites we are selling. Most owners know what environmental testing is, but I was surprised by how many people didn’t understand the timeline or the cost. Here is a real example from a current deal:

Phase 1 Ordered: 2/25/2026
Phase 1 Site Visit: 3/6/2026
Phase 1 Report: 3/10/2026
Phase 2 Ordered: 3/11/2026
Phase 2 Site Visit: 3/25/2026
Phase 2 Results: 4/6/2026

Total Days: 39
Cost: $15,000
Phase 1: $2,500
Phase 2: $12,500

This timeline and price can vary depending on property size and what the Phase 1 flags, but this is a solid benchmark for what to expect.

On the Market: 824 Humboldt Street, Greenpoint

• 6,000 SF on the ground floor

• 15’ clear height

• Curb cut

• 400 Amps

Asking: $3.25M or $525 per SF $2,950,000 or $491 per SF

In the Borough: Film Studio Going up in Red Hook

Walked by Bungalow Projects development in Red Hook. Still in the early stages, but once complete this will be a film and TV production studio spanning 246,000 SF, six story building with four stages!

Bobby Lawrence is a Vice President at Matthews Real Estate Investment Services, where he helps clients buy and sell industrial buildings, land, and development sites in Brooklyn and Queens. The views here are his own and don’t reflect those of Matthews.

Bobby Lawrence

Bobby.lawrence@matthews.com

(908) 616-5799

Price: $5,780,000
SF: 11,389
$/SF: $507
Notes: 10,575 SF ground level with 814 SF of mezz space. 16’ -18’ clear. The buyer is associated with a plumbing supply business.

My Take: In most cities, this warehouse would be considered obsolete. It sits in a heavily residential neighborhood, on a cobblestone street, with a Citi Bike station directly across from the drive-in door…Yet it traded for over $500/SF!

Why? Two Reasons. First, exceptional truck access to Manhattan via the Manhattan Bridge and the BQE. Second, this warehouse is a prime candidate for a residential variance at some point.

What Came Up with Clients This Month: Don’t Forget About Transfer Taxes

I had two conversations this past month with owners considering selling, and both were caught off guard by how much the city and state take in transfer taxes. Here is the example we walked through:

Property: $6M warehouse
NY State Transfer Tax (.65%): $39,000
NYC Transfer Tax (2.625%): $157,500

My general guidance when calculating your net proceeds is to budget for 8-10% of in selling costs. This depends on the deal size but covers transfer taxes, attorney fees, and broker fees.

As always, verify with your accountant!

On the Market: 275 Russell Street, Greenpoint

• 2-story building: 6,000 SF on ground floor, 3,033 SF on 2nd Floor

• 15’ clear height

• Two curb cuts with three drive-in doors

• Move-in condition

• 400 Amps

Asking: 3.95M or $437 per SF

In the Borough: Brooklyn Half Marathon

19 People from our NYC Matthews office participated in the Brooklyn Half Marathon this month. Celebrated after at Radegast in Williamsburg with a few steins! Competition, cold beer, and a beautiful day in Brooklyn — what else does one need?

Bobby Lawrence is a Vice President at Matthews Real Estate Investment Services, where he helps clients buy and sell industrial buildings, land, and development sites in Brooklyn and Queens. The views here are his own and don’t reflect those of Matthews.

Bobby Lawrence

Bobby.lawrence@matthews.com

(908) 616-5799

By the Numbers

Total Dollar Volume: $121.4M — a 60% increase compared to Q1 2025.

Transactions: 20 industrial properties traded hands, up from 19 in Q1 2025.

Buyer Trends: 80% of transactions were user-buyers, with 81% of these being first-time buyers

Gut Check on the Market:

Buyer activity is up! YTD, we’ve conducted 35 tours on our industrial inventory, well ahead of last year.

The majority of these buyers are first timers, and while they are still selective they seem more serious about making deals happen. I expect sellers to have more leverage as competition will drive better price and term heading into the rest of 2026.

2026 Q1 Notable Transactions

Address: 595 Berriman Street, East New York
Price: $6,100,000
SF: 16,500
$/SF: $370
Notes: Sold to user. 14,000 SF on the first floor with 2,500 SF of mezz space. 20’ clear

My Take: High clear height in a clean building is a premium product and market will continue to price it that way. I expect similar product in East NY to push $400/SF in the next year or two.

Address: 226 52nd Street, Sunset Park
Price: $3,300,000
SF: 7,400
$/SF: $445
Notes: Clean warehouse, with 3,700 SF of 2nd floor space. Bought by a church.

My Take: This is why pricing warehouses is tricky. Most industrial users don’t want second floor space. It’s inefficient for their operations, and their offers reflect that. My guess is that a majority of their offers were under $3M.

But then you have a different buyer pool. Non-profits, medical, and creative users. Groups that could actually use the second floor, and that’s where the premium comes in. The challenge is that those buyers are harder to find and harder to get to the closing table — hence this building being on and off the market for 17 months.

Address: 1062 39th Street, Borough Park
Price: $1,217,000
SF: 1,904
$/SF: $639
Notes: Building was 20’ x 95’ with 12’ clear height. Bought by user.

My Take: Always a good time to sell a small warehosue. At this price point, the buyer pool is massive due to affordability, which drives up the price.

Even buildings that aren’t in great condition will trade at premium numbers, especially in desirable neighborhoods like Borough Park.

Deal Of The Month

204 25th Street, Greenwood Heights

This two-story building is currently a coworking studio on the upper floor, and the lower floor is leased to a gym tenant paying $14,000 per month, with 3% annual increases, and 3 years remaining on the lease. The seller operates the co-working business, and the upper floor will be delivered vacant.

Highlights:
- Two-story, 14,084 SF Building
- M1-1 offers flexible zoning
- Across the street from a new 187-unit construction building
- ADA Compliant restrooms
- 15’ driveway on the east side of the building and 8’ side yard on the west side of the

Asking price is $5.5M ($390 per SF)

Bobby Lawrence is a Vice President at Matthews Real Estate Investment Services, where he helps clients buy and sell industrial buildings, land, and development sites in Brooklyn and Queens. The views here are his own and don’t reflect those of Matthews.

Bobby Lawrence

Bobby.lawrence@matthews.com

(908) 616-5799

Founded in 1927, Vigilante Plumbing has been serving Brooklyn for nearly 100 years!

In this episode, Sal, the third-generation owner, shares what it really takes to keep a family business alive for a century.

We talk about Hurricane Sandy and the moment they thought it might all end. How they rebuilt stronger than ever. Why culture matters more than talent. And what it means to run a company rooted in service and community.

From sending customers money back when a job was overpriced to replacing a boiler for a neighbor in need, this is the story of a business built on reputation, resilience, and responsibility.

Vigilante Plumbing is proof that longevity isn’t luck. It’s earned.

Bobby Lawrence is a Vice President at Matthews Real Estate Investment Services, where he helps clients buy and sell industrial buildings, land, and development sites in Brooklyn and Queens. The views here are his own and don’t reflect those of Matthews.

Bobby Lawrence

Bobby.lawrence@matthews.com

(908) 616-5799

What started as a two-man blacksmith shop founded by Sicilian immigrants has grown into a 200 plus person operation working on some of the most iconic buildings in America, including the Flatiron and the Woolworth building.

In this episode we talk about:

What it’s like to run a business with your brother for 25 plus years.

How they made the jump from ornamental work to structural installation.

Why reputation matters more than price.

Why Ralph was initially hesitant about his son joining the business.

And why they are leaving Brooklyn for an 80,000 square foot facility in Newark.

There is nothing flashy about this business. They do not even have a website. But through years of grit and discipline, and by living their guiding principle — Reputation Is Everything — Barone Steel has quietly built and scaled a generational company that continues to bet on growth.

If you care about generational businesses, New York City real estate, or what it really takes to operate at scale, this one is worth watching!

Bobby Lawrence is a Vice President at Matthews Real Estate Investment Services, where he helps clients buy and sell industrial buildings, land, and development sites in Brooklyn and Queens. The views here are his own and don’t reflect those of Matthews.

Bobby Lawrence

Bobby.lawrence@matthews.com

(908) 616-5799

Most of what I write about here is industrial and commercial real estate: pricing, market trends, and lessons I’ve learned selling warehouses and land across the boroughs.

But because this market is largely driven by user transactions, where one business owner or former owner sells to another, I’ve had the privilege of spending time learning the history of these businesses. Their struggles, their successes, and the family stories behind them.

And the longer I’ve been around these businesses, the more I’ve realized how important they really are.

Most don’t have billboards.
Some don’t even have websites.
They’re definitely not chasing attention.

But they’re the ones keeping the city running.

That idea is what led me to start Business Next Door, a video series where I sit down with family-owned and blue-collar businesses.

This month, I sat down with Kenny and Alex Gomberg of Brooklyn Seltzer Boys, the last traditional seltzer shop in New York City and one of the last in America.

In this episode, we discuss family, resilience, and how the next generation stepped in to keep a nearly extinct New York tradition alive — and turned it into a thriving business after most of the industry disappeared.

About once a month, I’ll be sharing an episode here featuring a family-owned or blue-collar business operating somewhere in the New York City area — most of them operating out of the same types of buildings we talk about in this newsletter.

Bobby Lawrence is a Vice President at Matthews Real Estate Investment Services, where he helps clients buy and sell industrial buildings, land, and development sites in Brooklyn and Queens. The views here are his own and don’t reflect those of Matthews.

Bobby Lawrence

Bobby.lawrence@matthews.com

(908) 616-5799

▪ Total dollar volume for the Brooklyn industrial market was approximately $235M. This represents a 76% decrease from 2024 and a 56% decrease from 2023.

▪ 66 industrial transactions exceeding $1M were recorded in Brooklyn, down from 101 in 2024.

▪ Warehouses traded at an average of $419 per SF.

▪ The average deal size was approximately $3.5M, down sharply from $9.5M in 2024 and $8.5M in 2023.

▪ 76% of transactions were bought by users, with 36% of these buyers being first-time buyers!

Top neighborhoods by transaction volume:

Greenpoint (9)

Williamsburg (6)

East New York (6)

Borough Park (6)

Sunset Park (6)

Three Trends That Shaped the 2025 Industrial Market

1. Dollar Volume & Average Deal Size Tell Different Stories

Dollar volume is often used as a proxy for institutional confidence, but in a low-velocity market like Brooklyn industrial, it can be misleading. One or two large trades can heavily skew the data.

For example, in Q4 of last year, just three transactions accounted for 54% of total annual dollar volume.

That’s why the average deal size is a better indicator of the health of this sector. In 2025, average deal size declined meaningfully versus prior years, which aligns with what we are seeing on the ground. Deals over $5M have become increasingly difficult to transact. The user buyer pool at this level has become thin, and the spread between investors and sellers widened in 2025 with taxes continuing to increase and vacancy rates moving in the wrong direction.

2. North Brooklyn Remains Strong

Williamsburg and Greenpoint accounted for 33% of the total dollar volume and 24% of all transaction activity in Brooklyn.

These neighborhoods continue to lead because of their versatility:

• Strong appeal to creative and light industrial users

• Access to major throughfares for manufacturing and distribution

• Ability to support destination retail rents (pickleball, gallery, event space, etc.), often 10-15% higher than traditional industrial leases

North Brooklyn remains the most liquid and resilient submarket.

3. Vacancy Increases + Slowing Rent Growth

North, Central, and West Brooklyn (according to CoStar)

• Rent growth: -0.4%, a sharp slowdown from +9% YOY rent growth in mid 2022

• Vacancy rate: 4.7%, and expected to rise over the next 12 months

South, East, and Central Brooklyn (according to CoStar)

• Rent growth: -.0.5%, down materially from +10% YOY in mid 2022

• Vacancy rate: 9.6% and expected to rise over the next 12 months

2025 marked a clear shift toward a more tenant-friendly market, and we expect that dynamic to continue in 2026. This shift is already having ripple effects across the market:

• Investors are underwriting longer lease-up timelines and being more conservative in projecting market rents

• Users, with more availability and leverage, have less urgency to buy and are increasingly choosing to lease instead

• Elevated vacancy, rising expenses, and flat rent growth have become, and will continue to be, a catalyst for owners to consider selling.

All of these trends are expected to intensify in 2026, particularly in submarkets with higher vacancy.

Bobby Lawrence is a Vice President at Matthews Real Estate Investment Services, where he helps clients buy and sell industrial buildings, land, and development sites in Brooklyn and Queens. The views here are his own and don’t reflect those of Matthews.

Bobby Lawrence

Bobby.lawrence@matthews.com

(908) 616-5799

Eli Roerden (Queens Industrial Specialist) and I were selling a 4,000 SF warehouse in Richmond Hill. After 16 tours, we found a buyer with strong terms who came in above asking.

At this point, the buyer was already pre-qualified by a Small Business Administration (SBA) lender. So, we sent a contract, and everything looked smooth until his SBA lender backed out at the last minute… and we were scheduled to close in seven days.

At this point, the contract was non-contingent and if he didn’t close, he would lose his deposit. This, and the fact that he couldn’t get another SBA loan due to the government shutdown, left him in a tough spot. The next step was to look at his hard money loan options.

What is Hard Money?

Hard money is a loan from a private lender or fund, secured primarily by the value of the property, and less about the borrower’s income or credit. It’s fast, short-term, and flexible — but expensive.

The first loan our buyer received was as follows:

Offer 1:

Loan Amount: 80%

Rate: 16%

Lender Fee: 6.45%

Term: 36 Months

Minimum Yield: 6 Months

Cost: Buyer puts down $10,000 deposit for insurance, title fees, and any expenses the lender incurs due to processing the loan

This offer was predatory and borderline criminal. But, given the buyer’s desperate situation, he was nevertheless strongly considering it.

Thankfully, Andrew Marcus, a debt broker at Matthews, brought a second offer that saved the buyer well over $100,000 in fees and interest.

Offer 2:

Loan Amount: 70%

Rate: 11%

Lender Fee: 2%

Term: 12 Months

Minimum Yield: 6 Months

Cost: None

We ended up closing two weeks later.

This deal serves as a reminder that when it feels like you’ve run out of options, take a breath, speak with a debt broker, and get multiple bids. Hard money can be a great option if you need to close quickly, your financing falls apart last minute, or the building you’re buying is not financeable. But can also bury you if you’re not careful.

Just Sold | 87-68 130th Street | $1,6200,00 | 4,000 SF | $405 per SF

Andrew Marcus | Debt Broker

(646) 298-3027

andrew.marcus@matthews.com

Eli Roerden | Queens Industrial Expert

(646) 809-7069

eli.roerden@matthews.com

Bobby Lawrence is a Vice President at Matthews Real Estate Investment Services, where he helps clients buy and sell industrial buildings, land, and development sites in Brooklyn and Queens. The views here are his own and don’t reflect those of Matthews.

Bobby Lawrence

Robert.lawrence@matthews.com

(908) 616-5799

▪ Total dollar volume for the Brooklyn industrial market was approximately $183M. This represents a 58% decrease from the same period in 2024 and a 21% decrease from 2023.

▪ 48 industrial transactions exceeding $1M were recorded in Brooklyn, down slightly from 50 in 2024.

▪ Warehouses traded at an average of $410 per SF.

▪ The average deal size was approximately $4M.

▪ 77% of transactions were bought by users, with 40% of these buyers being first-time buyers!

▪ Top neighborhoods by transaction volume:
Borough Park (7)
Greenpoint (5)
East NY (4)

Bobby Lawrence is a Vice President at Matthews Real Estate Investment Services, where he helps clients buy and sell industrial buildings, land, and development sites in Brooklyn and Queens. The views here are his own and don’t reflect those of Matthews.

Bobby Lawrence

Robert.lawrence@matthews.com

(908) 616-5799

What We’re Seeing in the Market

Tenant Demand
It’s becoming increasingly difficult to find tenants for larger industrial spaces. Brooklyn’s industrial vacancy rate has been hovering around 6%, and I expect that to sustain as fewer tenants feel the need to expand or relocate.

Buyer Pool Dynamics
The buyer pool continues to thin out for warehouses priced above $5 million. Financing challenges and flat-to-softening rents have pushed many private buyers and small funds to the sidelines. User buyers—like the tenant market—remain selective and opportunistic.

Sub-$2M Segment
The buyer pool remains strong for smaller warehouses under $2 million. This continues to be the most resilient segment of the industrial market.

Distress Emerging
Distressed and bank-owned assets are starting to hit the market. Nearly 12% of industrial sales this year have been bank- or lender-owned, a trend that’s likely to continue into 2026.

Deal of the Month!

Bank Owned Sale | 35,000 Vacant Industrial Package | Greenpoint

Click the image above for more information!

Bobby Lawrence is a Vice President at Matthews Real Estate Investment Services, where he helps clients buy and sell industrial buildings, land, and development sites in Brooklyn and Queens. The views here are his own and don’t reflect those of Matthews.

Bobby Lawrence

Robert.lawrence@matthews.com

(908) 616-5799

▪ Total Dollar Volume: $146M —a 60% decrease from 1H24 and a 12% decrease from 1H22.

▪ Transactions: 35 deals over $1M, down from 50 in 1H24 and 41 in 1H23.

▪ Average Price per SF: Warehouses traded at $455 per SF, in line with the same periods of 24 and 23.

▪ Average Deal Size: $4.1M, down from $7.1M in 1H24

▪ Buyer Trends: 80% of transactions were user-buyers, with 50% of these being first-time buyers!

Top neighborhoods by transaction volume:
Borough Park (5)
East New York (3)
Greenpoint (3)
Sunset Park (3)

Three Takeaways from the Brooklyn Industrial Market through 1H25

1. Where are the deals?

Dollar and transaction volume are both in the gutter – lowest we’ve seen in four years. What’s causing it? Hard to say.

Tariffs? I don’t think so, most of the deals went under contract 4-6 months ago before tariffs were implemented. Economy? Although there was a stock market dip earlier this year, it was not significant enough to freeze activity like this.

The real issue seems to be a lack of urgency. Buyers and sellers aren’t citing tariffs or the economy—they just don’t feel pressure to act.

That said, the active buyers are playing it smart: moving slow, staying picky, but willing to pay a premium when a property checks all the boxes.

2. Small deals, bigger premiums

$4.1M is the lowest average deal size we’ve seen in four years. From 2022 to 2024, the average was closer to $7M.

The trend isn’t new, it’s just more obvious now. With fewer listings on the market, user buyers are stepping up and paying big premiums for small, clean warehouses.

3. The hardest deal to sell: $10M-$20M

These “in-between” assets are stuck. They’re too big for most users—the pool of buyers with the capital and need for a property this size has shrunk since last year. At the same time, they’re too small for institutions, and the pricing rarely works on a yield basis. Sellers are still hoping a user swoops in to save the day, but in this market, that buyer is hard to find.

Just Sold | 439 20th Street | $3,875,000 | $467/SF

How hard is it to sell a warehouse when a bike lane across the street prevents tractor-trailer access?

Turns out… pretty hard!

But we stayed relentless! After 19 tours, 11 offers, and plenty of back-and-forth, we sold it to an end-user 15% above our average offer, and they even waived environmental due diligence.

This brings us to over $12,500,000 sold this year in Greenwood Heights alone, with another $8,000,000 in negotiations.

Seller Testimonial:

"Selling our family’s warehouse was a big responsibility, and Bobby didn’t take it lightly. He treated the property and our family’s legacy with care and gave the sales process everything he had. He was calm under pressure, always responsive, and most importantly, got us to a great outcome ."

— Karathanasis & Ermogenous Families

Bobby Lawrence is a Vice President at Matthews Real Estate Investment Services, where he helps clients buy and sell industrial buildings, land, and development sites in Brooklyn and Queens. The views here are his own and don’t reflect those of Matthews.

Bobby Lawrence

Robert.lawrence@matthews.com

(908) 616-5799

I break all of this down below and share why I think every seller should order a Phase 1 before going to market. It saves time, money, and puts you in the strongest position to negotiate.

What is a Phase 1?

A Phase 1 Environmental Site Assessment involves a 300+ page report from an environmental consultant that flags potential contamination. It includes:

• A site inspection

• A review of the property's current and historical uses

• Research into known oil spills or nearby contaminated sites

At the end, the firm gives a recommendation—either you’re good to go, or more testing (a Phase 2) is advised. These firms are conservative by nature and in my experience, 80% of the time, they recommend further testing.

So, what’s a Phase 2?

That’s when they collect soil, water, or vapor samples to see if contamination is present. It’s intrusive testing with drilling or digging on-site. Much more expensive than a Phase 1, and usually takes around ~30 days to turn around the results.

Why do buyers need it?

Risk – If there’s contamination, cleanup can be expensive. Buyers want to know what they’re getting into.

Financing – Banks won’t lend without a Phase 1. It’s a standard requirement to get a loan.

When does this happen in the process?

Typically, it’s negotiated as a contingency in the contract. Buyer and seller agree on terms, then go under contract subject to a 30–45 day due diligence period. Buyer pays for the testing.

That means before going under contract, the attorneys have to agree on what happens if a Phase 2 is required and the results come back bad. Who pays for remediation? Can the buyer walk? Can the seller walk? Are there cost thresholds where the seller is responsible or vice versa?

Sometimes this clause is straightforward. Other times, it turns into a legal tug-of-war. And that’s the issue—even if a Phase 2 never happens, just negotiating the possibility can drag out the contract process. It ends up taking more of the seller’s time, patience, and potentially money in legal fees. And the longer it takes, the more it kills the momentum we created when you first accepted the offer. That shift in leverage often puts the ball in the buyer’s court—and that’s when you’re at risk as a retrade on price or terms.

That’s why I always tell sellers—just do the Phase 1 before going to market.

Here’s why:

1. It’s relatively cheap. Usually around $1,800–$2,000.

2. It gives you more clarity before you're in the weeds of negotiating a contract.

3. Most importantly, it puts you in the best position to shorten timelines, capitalize on momentum, and make informed decisions.

If it comes back clean, great—there’s no uncertainty. You keep momentum and usually end up with more money and stronger terms.

If it’s inconclusive—something like, “no apparent issues on site, but further testing recommended due to nearby uses”—and you’ve got a competitive bidding process, you can often get a buyer to skip the Phase 2. If they want the deal badly enough, they’ll take the risk.

And if it suggests possible contamination, now you have time to talk to multiple professionals, get real numbers, and make an informed decision.

I’ve seen sellers spend 3 months marketing a property, finally go under contract, and then get a bad Phase 2 report. At that point, they’re so worn down they end up taking a price cut or conceding on terms just to get the deal done.

Moral of the story: just do the Phase 1. It puts you in the best position to get the highest price, saves time, and creates a less stressful process.

Industrial Inventory for Sale:

Vacant Warehouse for Sale in Bushwick | 22,400 SF with 5,500 SF of Parking | 21 Ft Ceilings

16,500 SF Vacant Warehouse | 24' Clear | Greenwood Heights

M2-1 Land for Sale in Gowanus | 20’ x 75’ |Price Reduced

Under Contract

Vacant Warehouse for Sale in Greenwood Heights

15,000 SF Warehouse for Sale in Coney Island

40’ x 100’ Single Story Warehouse | 22’ Clear | Queens

Bobby Lawrence is a Vice President at Matthews Real Estate Investment Services (MREIS) focusing on the sale of investment property in the Brooklyn markets. Opinions are his own and do not reflect those of MREIS.

Bobby Lawrence

Robert.lawrence@matthews.com

(908) 616-5799

Brooklyn Industrial Slowed Sharply in Q1 2025

▪️ Total dollar volume was about $88M — a 55% drop compared to Q1 2024.

▪️ Only 19 industrial properties traded hands, the lowest number of transactions since Q1 2021.

▪️ The average sale price landed at $4.6M.

▪️ User buyers made up 68% of the market, and notably, 38% of those users were first-time buyers.

Gut Check on the Market:

▪️ User demand is still there — but uncertainty is slowing down decision-making.

▪️ The first-time buyer pool feels noticeably shallower compared to previous years.

▪️ Investors are becoming a more compelling option for sellers on higher-priced deals, as the pricing gap between users and investors continues to narrow.

Industrial Inventory for Sale:

Vacant Warehouse for Sale in Bushwick | 22,400 SF with 5,500 SF of Parking | 21 Ft Ceilings

16,500 SF Vacant Warehouse | 24' Clear | Greenwood Heights

Vacant Warehouse for Sale in Williamsburg | 8,600 SF

40’ x 100’ Single Story Warehouse | 22’ Clear | Queens

6,500 SF Warehouse for Sale |18.5 Clear | Queens

M2-1 Land for Sale in Gowanus | 20’ x 75’ | Asking $775K

Under Contract

Vacant Warehouse for Sale in Greenwood Heights

15,000 SF Warehouse for Sale in Coney Island

Bobby Lawrence is a Vice President at Matthews Real Estate Investment Services (MREIS) focusing on the sale of investment property in the Brooklyn markets. Opinions are his own and do not reflect those of MREIS.

Bobby Lawrence

Robert.lawrence@matthews.com

(908) 616-5799

What is a Battery Storage Company?

Battery storage companies help stabilize New York’s power grid, which has become increasingly unreliable during peak demand months and led to more frequent blackouts.

To fix this, the city is encouraging the development of Battery Energy Storage Systems (BESS) that can store energy and release it when demand spikes.

BESS buys energy from the city when electricity is cheap (late night/early morning) and sells it back when demand and prices are high (hot summer afternoons). They’re also paid for their availability, acting as a backup generator for the city during an emergency.

How Are Their Offers Structured?

These aren’t your typical industrial leases. Here’s an example from a recent offer I received on an industrial building in the Bronx:

Rent: $18-20/SF NNN with 2.5% annual increases

Initial Term: 26 years (have seem them longer as well)

Renewal Terms: Tenant has four, five-year extensions.

Due Diligence Period: 270 days, with a 180-day extension

Demolition Of Existing Building: Tenant can demolish any structures and is not required to rebuild.

These offers can be tough for some owners to digest. The biggest objections I hear from owners are the length of the lease and the long due diligence (DD) period. The DD period is necessary because battery companies need up to 12 months to get approvals from ConEd. And, given the amount of capital they’re putting into these sites, they require long-term control.

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Who Does It Make Sense For?

Battery companies aren't for everyone, but there are situations where these offers make a lot of sense:

• Owner-users looking to retire in the next few years and don’t want to deal with a 1031. You can keep operating while they complete DD.

• Owners in tertiary or lower-demand markets where the battery company’s offer exceeds what the market would typically pay.

• Owners seeking passive income and willing to sign a long-term lease with minimal landlord responsibilities.

Battery deals can be a great fit under the right circumstances, but they’re very different from a standard lease or sale—and with long-term commitments like these, the devil is in the details.

If you’ve received an offer or are curious whether your property might be a fit for a battery storage company, don’t hesitate to reach out!

Just Sold! Click the Picture Below to Learn More About the Sale!

Bobby Lawrence is a Vice President at Matthews Real Estate Investment Services (MREIS) focusing on the sale of investment property in the Brooklyn markets. Opinions are his own and do not reflect those of MREIS.

Bobby Lawrence

Robert.lawrence@matthews.com

(908) 616-5799

Transactions: 102 deals over $1M, up from 61 in 2023 and 101 in 2022.

Average Price per SF: Warehouses traded at $488 per SF, up from $445 in 2023.

Average Deal Size: $9.5M.

Buyer Trends: 70% of transactions were user-buyers, with 58% of these being first-time buyers!

Top Neighborhoods by Transaction Volume: Williamsburg (21), Sunset Park (10), Greenpoint (10).

You can access the full market report here: 2024 Brooklyn Industrial Market Report

Three Trends That Shaped the 2024 Industrial Market

1. Institutional Deals Roar Back

Big players came out swinging in Q4, making up 54% of the year’s total dollar volume. Three monster deals over $100M closed to cap off the year:

280 Richards Street (Amazon-leased Red Hook warehouse) sold for ~$156M.

410 Kingsland Avenue (10-acre Greenpoint site) sold for ~$120M.

222 Morgan Avenue (7+ acres in Williamsburg) sold for ~$105M.

2. M-Zone Land Heats Up

Industrial-zoned land stole the show in 2024, with 27 deals totaling ~$462M—representing 47% of all industrial sales. Investors are bullish on last-mile development, outdoor storage, battery storage, charging stations, and production facilities, accounting for 55% of these transactions.

3. Find the Artists

First-time buyers made up 40% of all transactions and often paid premiums compared to the rest of the market. Artists and creative users stood out, driving 17% of these deals and claiming the 3 highest price-per-square-foot sales of the year!

Brooklyn’s industrial market continues to showcase its resilience, with user buyers leading the way and institutional deals returning. With this momentum, we anticipate 2025 to be a banner year.

Just Sold | Single-Story Warehouse | $6,800,000 | $550 per SF

Price record for the neighborhood! Feel free to reach out if you want to discuss further.

Bobby Lawrence is an Associate Vice President at Matthews Real Estate Investment Services (MREIS) focusing on the sale of investment property in the Brooklyn markets. Opinions are his own and do not reflect those of MREIS.

Bobby Lawrence

Robert.lawrence@matthews.com

(908) 616-5799

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From an investment perspective, the difference between a 15' clear and a 22' clear can translate to a 20% or more premium in rent or sales price. For business owners, higher clear height enables maximized storage capacity, creating cost savings through increased efficiency and, in some cases, allowing businesses to grow without needing to buy or lease additional space.

With these market dynamics in play, higher clear heights aren’t just a nice-to-have—they’re a game-changer. But what if your warehouse doesn’t meet the height requirements?

That’s why I connected with Craig Jones, principal of Rooflift Specialists! Craig represents, Rooflifters, helping building owners across the country safely, cost-effectively, and efficiently raise their existing roof structures. The results? Higher rents, increased property value, and better operational performance. See below for our Q&A with Craig to learn more about the process and benefits of roof lifting!

Craig has been in the roof-lifting business since 1979, successfully involved in the redevelopment of over a billion in commercial real estate across North America. With over 40 years of experience, Rooflifters’ client roster includes some of the largest companies in North America as well as numerous smaller private individuals and companies.

1. Can you walk us through the process of lifting a roof? What steps are involved, and how does your team ensure structural integrity and safety throughout the project?

Our patented process ensures the utmost structural integrity and safety throughout the roof lifting. Temporary lift columns or crib posts are precisely stationed next to each existing column. These crib post locations are meticulously engineered to align with our specialized lifting methods. Once the crib posts are securely set, hydraulic pressure is applied, allowing for the cutting of the existing columns. The roof is then gradually pushed up to the desired height.

After the roof is lifted, we install new full-length or stub columns to ensure permanent structural support. All new steel, bracing, and related components are thoroughly engineered and submitted to the local building department for permit approval before the project’s commencement.

2. What types of buildings and industries are best suited for roof lifting? Are there any size or structure limitations that potential clients should be aware of?

With our process, we can lift virtually any type of building or roof structure, including steel, wood (such as glue-lam beams, which are common in many of our California projects), concrete, or pre-engineered structures.

Our experience spans a wide range of applications, including warehouses, self-storage facilities, life sciences labs, sports and entertainment, and numerous retail properties—working with both owners and tenants to meet their specific needs.

3. What factors impact the cost of a roof lifting project, and how do you help clients assess whether it’s a cost-effective solution compared to other options, like a full rebuild?

Our process is significantly less expensive and much faster than undertaking a full structure replacement. Otherwise, we would not be in business. Lifting an existing roof typically falls under the “renovation” category with most cities, which helps avoid additional expenses such as site plans, development charges, and other fees that are often required for a rebuild.

There are many factors that determine costs. Here are a few:

1) The square footage being lifted.

2) The current clear height of the building.

3) The new clear height.

4) The column spacing.

5) The existing and new perimeter wall type.

Larger buildings often benefit from economies of scale; while the overall cost increases with larger roof areas, the cost per square foot tends to decrease. This is why we emphasize that a cost estimate for one building may not apply universally to others. Each project is unique, and precise estimates depend on the specific details of the structure.

4. How long does a typical roof lifting project take from start to finish, and what factors can influence that timeline?

As an example, to lift 100,000 square feet about 10’ higher will take about 60-90 days to prepare, lift, and install the new columns.

5. Why should someone work with you?

We offer a unique service, combining full project involvement with open-book transparency, construction management, and owner’s representative options. Additionally, our extensive general contracting experience allows us to provide unparalleled expertise in this highly specialized market. We are committed to ensuring every project is completed as cost-effectively and value engineered as possible, which is why we remain a leader in the industry.

Please contact Craig if you want to discuss further or receive a quote.

Craig Jones

cjones@roofliftspecialists.com

410.627.9869

Sold & Financed | Gowanus Development Site | $337 / BSF

We’re pleased to announce the sale of 415 Smith Street, a 63’ x 106’ development site in Gowanus. Though currently a vacant single-story warehouse, the zoning (R6B/M1-4/C2-4) allows for a mixed-use development up to 12,600 buildable ZFA. The property sold for $4,250,000 ($337 /BSF) to a NYC-based developer.

Andrew Marcus of Matthew REIS’ debt origination team also arranged the purchaser’s acquisition loan.

Bobby Lawrence is an Associate Vice President at Matthews Real Estate Investment Services (MREIS) focusing on the sale of investment property in the Brooklyn markets. Opinions are his own and do not reflect those of MREIS.

Bobby Lawrence

Robert.lawrence@matthews.com

(908) 616-5799

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Early in my career, hearing this from a property owner made my stomach sink. It often meant they weren’t motivated to sell—and, even worse, I didn’t know how to respond.

That's why I thought it would be informative to have a Q&A with Robert Huberman, a land use attorney at Herrick Feinstein LLP, whose firm has successfully spearheaded multiple rezoning. He broke down the realities of rezoning in NYC and gave me the confidence to be educated next time that question comes up.

Robert Huberman is a partner in Herrick's Land Use and Zoning Group where he advises developers, property owners, attorneys, architects, and engineers on all aspects of land use and zoning in New York City.

1. Can you give an overview of what the process is to apply for a private rezoning?

Rezonings are subject to the Uniform Land Use Review Procedure (ULURP), which, while complex and somewhat time intensive, can have profound impacts on the value and development of real estate.

ULURP consists of two phases, the first of which is called “Pre-Certification.” In the Pre-Certification phase, the Applicant team will, among other things, meet with various City agencies – including the Department of City Planning – and prepare land use and environmental applications for the proposed rezoning. This phase is highly technical and can take a considerable amount of time to navigate.

Once the land use and environmental applications are “certified” as complete, the Applicant will enter the second phase of ULURP, which consists of public hearings before the local Community Board and Borough President, the City Planning Commission, and the City Council. Each of these entities will vote on the rezoning, but the City Council, generally, casts the final and decisive vote.

Rezonings often take two or more years to complete. The likelihood for success depends heavily on the professional team that is used to navigate the process.

2. Are there certain indicators or neighborhood characteristics that make it more likely for a rezoning to pass?

There are several indicators and neighborhood characteristics that make it more likely for a rezoning to pass.

One of the most important factors is neighborhood context. Generally, the City is more likely to approve a rezoning that complements the built character and existing zoning districts surrounding the proposed rezoning area.

The City also tends to favor high density rezonings in areas that are well served by public transportation and open space, since these areas are better suited to handle larger populations and denser developments.

The City’s policy goals also affect how likely a rezoning is to succeed. For example, the City will not entertain residential rezonings in any of the City’s 21 “Industrial Business Zones,” which are located in certain areas of the City that are zoned for manufacturing use. Note, not all manufacturing districts are Industrial Business Zones.

3. Most successful rezonings involve larger properties and larger projects. Why do you think that is?

Rezonings are expensive and time intensive endeavors, so they’re generally not cost effective for smaller projects. In addition, rezoning smaller properties can sometimes be considered “spot zoning,” which is not allowed in New York. Generally, spot zoning is when a property – usually a smaller property – is zoned differently from the surrounding area and does not serve a clearly identified public purpose.

4. What is the Mayor’s “City of Yes” proposal and what opportunities will it provide to landowners, specifically in Manufacturing Districts, who are interested in rezoning their property.

“City of Yes” consists of three zoning text amendments which will include some of the most comprehensive changes to zoning since the modern-day Zoning Resolution was enacted in 1961. Of the three proposals, “Zoning for Economic Opportunity” (ZEO), which was approved in June 2024, will have some of the biggest impacts on Manufacturing Districts.

Generally speaking, ZEO reduced, and in some instances eliminated, burdensome open space, parking, and loading requirements from certain M-zoned properties. The biggest change, however, is that ZEO created several new Manufacturing Districts that permit more uses (not residential) and allow higher floor area ratios (FAR), ranging between 2-15 FAR (Lot Area x FAR = permitted floor area). This will allow for much more bulk, density, and flexibility in many of these new districts. Note, however, a property must be rezoned to one of these new districts to take advantage of the benefits afforded to them.

5. Why should someone work with you when going through this process?

Our firm has an impressive track record when it comes to obtaining rezonings and other discretionary approvals. Our team is made up of seasoned zoning attorneys and urban planners, many of whom previously worked at the Department of City Planning – the agency that oversees the rezoning process. With decades of knowledge and experience, we’re uniquely well-situated to handle any and all rezoning projects. Learn more about Herrick’s experienced Land Use & Zoning Team and powerhouse Real Estate Department on our website.

Robert Huberman
Partner
Herrick, Feinstein LLP
Two Park Avenue | New York, NY 10016
212.592.1592 Office
rhuberman@herrick.com

This is intended as a general guide only. It does not constitute a legal analysis or an opinion of Herrick, Feinstein LLP or any member of the firm. It is recommended that readers not rely on this general guide when structuring individual transactions, but that professional advice be sought in connection therewith.

57,000 SF Warehouse Portfolio for Sale in Sunset Park

Bobby Lawrence is an Associate Vice President at Matthews Real Estate Investment Services (MREIS) focusing on the sale of investment property in the Brooklyn markets. Opinions are his own and do not reflect those of MREIS.

Bobby Lawrence

Robert.lawrence@matthews.com

(908) 616-5799