Sell your building in Brooklyn

The Brooklyn buildings we list and how buyers read each one

Brooklyn does not have one commercial buyer. It has several buyer pools that rarely overlap, and each one reads a building differently. The first thing we do when an owner calls about selling is figure out which pool, or pools, will pay the most for this specific property. That decision shapes the price, the marketing package and the order in which we call people.

Many Brooklyn properties sit in more than one category. A two-story garage on a block that allows residential use is an industrial building to one buyer and a development site to another. Pricing it for only one of those groups is one of the most common ways owners leave money on the table.

Rent-stabilized versus free-market units after the 2019 rent law

If your building has six or more apartments and was built before 1974, there is a good chance some or all of the units are rent stabilized. That single fact moves value more than almost anything else in a Brooklyn multifamily sale, and the reason is the Housing Stability and Tenant Protection Act of 2019 (HSTPA).

Before 2019, buyers often paid for upside: the expectation that stabilized units could eventually be brought to market through vacancy increases, apartment improvements or high-rent vacancy deregulation. The 2019 law largely closed those paths. It ended high-rent deregulation, eliminated the vacancy bonus, and put tight limits on how much an owner can recover through individual apartment improvements and major capital improvements. Rules have been adjusted since, so we always confirm current requirements with counsel before we describe them to buyers.

What that means for a seller today is simple: buyers underwrite stabilized units at their current legal regulated rents, with modest growth, and they price in the real cost of maintaining older apartments. Free-market units are underwritten on market rents. A building with a strong mix of free-market units, or one that is properly documented as never having been stabilized, is read very differently from a fully regulated building.

Where sellers get surprised

• Registered rents on file with New York State Homes and Community Renewal (DHCR) do not match what tenants actually pay, or registrations were missed for some years.
• Units were treated as deregulated, but the paper trail does not support it. Buyers and their lenders will find this, and it can reprice the deal or kill it.
• Preferential rents, rent credits or informal arrangements with long-time tenants that never made it onto the rent roll.
• Tax benefit programs on the building that came with regulatory obligations the current owner was not aware of.

We review the DHCR registration history and leases with you before the building goes out, and we encourage owners to have their real estate attorney look at anything unclear. It is far better to price a known issue than to have a buyer discover it during due diligence and use it to renegotiate.

Selling a development site or air rights in Brooklyn

A development site is sold on what can be built, so the first document we prepare is not a photo set. It is a zoning analysis. We look at the zoning district, the lot area, the maximum zoning floor area (the floor area ratio applied to the lot), height and setback rules, permitted uses, and whether any special district, landmark designation or mapped street widening affects the parcel. Where it matters, we bring in a zoning consultant or architect to confirm the numbers, because developers will check them line by line.

Unused development rights

If your building is smaller than the zoning allows, the difference may be valuable. In New York City, unused floor area can often be transferred to an adjacent lot through a zoning lot merger, recorded with a zoning lot development agreement. The likely buyers are the owners of the lots next to you, which makes this a small, targeted negotiation rather than a broad marketing campaign. We identify those owners, approach them directly, and help your attorney structure the transfer so your building keeps what it needs.

Assemblages

Two or three adjoining lots are often worth more together than separately because they create a buildable footprint a single lot cannot. Assemblage sales take patience. Owners rarely move on the same schedule, and one holdout can change the math for everyone. We have worked on a Brooklyn assemblage from the developer side, so we understand how buyers model these deals and where sellers have room to negotiate.

Gowanus and other rezoned areas

The Gowanus neighborhood rezoning approved by the City Council in 2021 changed what can be built on many lots around the canal, allowing residential use and more density in places that were previously limited to manufacturing and commercial uses, with Mandatory Inclusionary Housing applying to new residential floor area. Environmental conditions near the canal, which is a federal Superfund site, are part of every buyer’s review. If you own in Gowanus, your site may be worth something very different than it was a few years ago, in either direction depending on the lot. Citywide zoning text changes adopted in recent years can also affect what is allowed, so we confirm the current rules for your specific lot before we set a price. See our Brooklyn development sites page for how we work with buyers on the other side.

Industrial property: who buys it and what they look for

Brooklyn industrial buildings are scarce, and scarcity helps sellers, but only if the building is presented to the buyers who value it most. A last-mile logistics operator cares about clear height, loading, truck access and how close the building is to the expressway network. A local contractor or food producer wants a building it can own and occupy. A developer is looking at zoning and the land underneath.

Before marketing, we confirm the zoning, the certificate of occupancy, the number and type of loading doors, power, sprinklers, and any environmental history, such as former gas stations, dry cleaners, auto repair or fuel oil tanks. Most industrial buyers and their lenders will order a Phase I environmental site assessment. If there is a known issue, we would rather you hear it from your own consultant first. Sunset Park, Red Hook, Greenpoint, East Williamsburg and the canal area each have a different industrial buyer profile, and we tailor the outreach to match.

What Brooklyn buyers check before they sign

Serious buyers and their lenders run the same searches on every Brooklyn building. We run them first, so the price we agree on with you already reflects what they will find.

Larger buildings may also face emissions limits under Local Law 97, and buyers now ask about it. Requirements and thresholds change, so we confirm current obligations for your building with the appropriate professional rather than guessing. Because Sal is also a licensed general contractor, we can look at a roof, a boiler room or an open permit and tell you plainly whether it is a small fix or a pricing issue.

Estate sales and buildings owned by families

A large share of Brooklyn’s small buildings have been in the same family for decades. When those buildings sell, the brokerage work is often the easy part. The harder part is getting several owners, sometimes in different states, to agree on price, timing and who handles what.

• If the owner has passed away, the executor or administrator generally needs authority from the Surrogate’s Court before signing a contract. Your estate attorney will tell you what is required and when you can list.
• Siblings or cousins who inherited shares should agree on a decision process up front, including who signs and how offers are approved.
• Long-time family tenants, relatives living in apartments, or informal arrangements need to be documented before buyers see the rent roll.
• Basis and estate tax questions belong with your CPA and attorney. We supply the market evidence they need, including a broker’s opinion of value.

We keep every owner on the same page with one written update after each milestone, which removes most of the friction that slows family sales down.

1031 timing when you are the seller

If you plan to roll your proceeds into another investment property, the exchange starts before your sale closes. A qualified intermediary has to be in place so the proceeds never pass through your hands. After closing, you have 45 days to identify replacement property and 180 days to close on it. Your CPA confirms whether the sale qualifies and how much needs to be reinvested.

Many Brooklyn owners trade into property in other markets, including Florida, where we also hold a brokerage license. We can start looking at replacement options in Southwest Florida or elsewhere while your building is in contract, so the identification window does not start cold. Our 1031 exchange advisory page covers the process in more depth.

Transfer taxes and foreign sellers

Two transfer taxes typically apply to a Brooklyn sale: the New York City Real Property Transfer Tax (RPTT) and the New York State real estate transfer tax. In commercial sales, the seller customarily pays both, although the contract can say otherwise. Rates depend on the price and the type of property, and higher-priced residential transfers can also trigger the state’s additional tax on buyers (the mansion tax concept), which is generally a buyer cost. Your CPA or attorney should run the numbers before you set your bottom line.

Foreign sellers have an extra step. Under FIRPTA, the buyer is generally required to withhold a portion of the gross sale price and send it to the IRS unless an exception or reduced withholding certificate applies. New York State has its own requirements for nonresident sellers as well. Neither should be a surprise at the closing table, so foreign owners should involve a CPA and attorney before we list.

Our marketing plan for a Brooklyn listing

1. Valuation and pricing. We pull recent comparable sales, rebuild the income and expenses the way a buyer and lender will, and give you a price range with the reasoning written out. Our commercial property valuation page explains the method.
2. Document package. Rent roll, leases, expense history, DHCR registrations, violation searches, CofO, survey and floor plans go into an organized data room before launch, so buyers can underwrite in days rather than weeks.
3. Offering memorandum. A clear write-up of the building, the income, the zoning and the neighborhood, with photos and plans. For development sites, the zoning analysis is the centerpiece.
4. Launch. We list on the Brooklyn MLS and major commercial listing platforms, then call the buyers we know are active for this type of building: local owner-operators, family offices, developers, 1031 buyers and, for smaller buildings, end users.
5. Tours and questions. We schedule tours around tenants, give proper notice, and answer buyer questions in writing so every bidder works from the same information.
6. Offer deadline. Once interest builds, we set a date for offers so buyers compete against each other instead of negotiating against you one at a time.

Offers, best and final, and the New York contract

Price is only one line of an offer. We compare the down payment, financing contingency, due diligence period, closing date and the buyer’s track record of actually closing. A slightly lower price from a buyer with no financing contingency can be the stronger offer. When several offers are close, we call a best-and-final round and ask everyone to sharpen terms by a set deadline.

Once you accept terms, your attorney drafts the contract of sale and the buyer’s attorney negotiates it. New York sales differ from Florida here: brokers do not write the contract. The buyer usually signs first and delivers a down payment, often around 10 percent of the price though it is negotiable, which your attorney commonly holds in escrow until closing. We keep the deal moving between the two attorneys, track deadlines, and handle buyer access during due diligence.

From contract to closing

Between contract and closing, the buyer orders title, a survey, environmental and building inspections, and their lender’s appraisal. Your attorney clears title objections, open violations the contract requires you to address, and any mortgage payoff. Tenant estoppel certificates may be requested for commercial leases. At closing, the deed is signed, transfer tax forms are filed, the buyer’s funds are released, and rents, real estate taxes and water charges are adjusted between buyer and seller. Expect your attorney and title company to need recent water and tax bills, so keep them handy.

Neighborhood notes for Brooklyn sellers

Each part of Brooklyn has its own buyer pool and its own sticking points. A few quick notes, with links to our neighborhood pages:

• Gowanus: rezoned sites, industrial buildings and canal-adjacent environmental review. Developers dominate the buyer pool for many lots.
• Williamsburg and Greenpoint: retail corridors, mixed-use buildings and remaining industrial pockets. Waterfront areas were rezoned in 2005, so zoning varies sharply block to block.
• DUMBO and Brooklyn Heights: landmark districts shape what a buyer can change, which matters for both renovation and air rights. Brooklyn Heights was the city’s first historic district.
• Downtown Brooklyn: higher-density zoning, office and retail buildings, and buyers who think in terms of large redevelopment.
• Carroll Gardens: brownstone-scale mixed-use and walk-up buildings with strong demand from local owner-operators. Parts of the area are landmarked, so check before pricing an addition.
• Red Hook: industrial and waterfront property where flood exposure and insurance are part of every buyer’s underwriting.
• Bushwick: walk-up multifamily, mixed-use and converted industrial buildings, with a deep pool of private investors.
• Sunset Park: manufacturing and warehouse buildings plus busy retail avenues serving a dense residential base.

A hypothetical Brooklyn sale, step by step

For example, a hypothetical family owns a four-story mixed-use building on a commercial avenue: one store and six apartments, four of them rent stabilized. The store tenant’s lease ends in eighteen months. Brought to market with no preparation, buyers would discount the store as a near-term vacancy and question the apartment records.

In this hypothetical, we would first check the DHCR registrations against the leases and resolve a missed year with the owner’s attorney. Next, we would talk with the store tenant about a renewal before launch, so buyers see a longer lease instead of an expiration. The offering would separate the retail value from the residential value and show the zoning, in case the lot has unused floor area. A marketed process with an offer deadline would then let buyers compete on price and terms. This is an illustration only, not a past transaction.

How listing commissions work

Our listing commission is negotiated with you before we start and written into a listing agreement. It is paid by the seller from the sale proceeds at closing, and only if the sale closes. If a buyer’s broker brings the buyer, the listing agreement spells out how compensation is shared. Fees depend on the property type, price, complexity and the work involved, such as a development site requiring a zoning study or an assemblage involving several owners. We explain exactly what you will pay before you sign anything.

Seller checklist before we go to market

• Current rent roll with lease start and end dates, rents, security deposits and any concessions
• Copies of all leases, renewals and commercial lease amendments
• Two to three years of income and expenses, real estate tax bills and water and sewer bills
• DHCR registration history for any stabilized apartments
• Certificate of occupancy or records showing legal use, plus any open permits
• List of known HPD and DOB violations and what has been done about them
• Recent facade, gas piping and boiler inspection filings, if applicable
• Survey, floor plans and any zoning or environmental reports you already have
• Your real estate attorney’s contact information, and your CPA if you plan a 1031 exchange
• For estates: letters testamentary or letters of administration, or your attorney’s timeline to obtain them

Missing a few items is normal. We will help you fill the gaps. When you are ready, contact us for a valuation or read about our Brooklyn investment sales work.