Remy Raisner is the Founder and CEO of The Raisner Group, a Brooklyn-focused Real Estate Private Equity company.
In New York City, Brooklyn has been on the rise since the global financial crisis reshaped the Big Apple in 2008. The real estate market has reached a new level since the Covid pandemic. Now, a real estate supercycle is on the horizon.
What Is A Real Estate Supercycle?
A supercycle is a period of extended growth and high demand. It features rising prices, sustained demand for both rental and for-sale housing, increased construction, and strong economic growth.
Several factors hint at this. First, interest rates have started to drop since last year. They are decreasing less rapidly than anticipated, and remain at a high level, but nevertheless, are on a downward trajectory, which of course would propel real estate dramatically.
In addition, while the slow-played banking crisis of the past two years is not fully resolved yet, the picture has bettered. 2025 seems to witness improved banking activity. We have been surprised this year with the number of bids to lend on our deals. Supply and demand among commercial banks is an underestimated driving factor of the ultimate interest rates on commercial real estate loans.
The State Of The New York Real Estate Market
The overall real estate picture is improving as well. In New York, the left-for-dead office market bottomed out in 2023, and office leasing activity was quite strong in 2024 (at least for top-of-the-line space).
Nationally, the multifamily asset class, which became overbuilt by 2021 particularly in southeast and southern markets, has seen supply absorbed and is now poised for a comeback.
As one of the fastest-growing New York submarkets, Brooklyn will certainly ride atop the forming wave of optimism. Our national economy is also thriving, with AI promising a chance of a new period of “roaring twenties.”
Furthermore, the New York political climate has improved. With the passing of anti-landlord laws in 2019 and a Covid eviction moratorium that lasted almost two years, New York was labeled anti-business. However, sentiment started shifting in 2024 with clearer rules being enacted. Institutional investors have come back, making the city a popular investment destination once again.
A testament to this is the “City of Yes,” New York’s landmark zoning initiative launched by Mayor Eric Adams, with the goal of modernizing and updating the city’s zoning, fostering a pro-business environment, and spurring large-scale housing construction. New York’s zoning resolution had not been overhauled in a major way since 1961. All of the above is also happening against the backdrop of a White House that wants to prioritize housing creation.
Brooklyn’s Unique Position for Growth
Today, New York City is still a 6% cap rate market (meaning that real estate trades at 6% yields), while the “hot markets” in the U.S. in the Southern Belt trade at 5%. This price anomaly will continue to spur interest in what is considered the bluest chip market.
Despite all efforts to build more, New York is still land-constrained: There isn’t much room to grow the housing stock, and developing in the Big Apple is notoriously hard. Therefore, inventory will keep being low, which will push prices up for all things bricks-and-mortar.
New York City has now fully recovered from the pandemic and is at an all-time high for tourism and job creation. It has become a tech mecca, and no slowdown of population growth is on the horizon. For a city that has always felt expensive, the ratio of income to rents for Brooklyn has never been as high in the past decades—an under-noticed and underestimated fact.
In a fascinating development, Brooklyn’s population last year bypassed that of Chicago, with close to 2.7 million inhabitants. Chicago had long been considered the nation’s third-largest city. For Brooklyn to surpass it in population is a testament to its rise and appeal, all against the backdrop of its development as a hub for arts, culture and innovation drawing residents from all over the world.
Implications For Investors And Buyers
It is a common saying in the commercial real estate industry that the business is cyclical, and within 10 years, there are two to make money and eight to manage assets. We are in the prime investment period.
Vin Krstic of The Raisner Group said, “Since peak interest rates in late 2023 and as both covid-related issues and political climate concerns fade away for the New York City market, we have seen institutional investors express increasing interest in it, and international allocators of capital come back gradually. In particular, Japanese investors have shown an appetite not seen since the 1980s and the Japanese ownership of the Rockefeller Center.”
This further demonstrates how foreign capital is coming back increasingly to the New York market since last year, and particularly from Europe and Asia, to a higher degree than before Covid. Private Equity investments in New York real estate are still down from previous levels, but we can expect capital to catch up, and therefore all the more believe 2025 has very strong fundamentals for investors.
Brooklyn: A Booming Hub For Innovation And Growth
For the aforementioned reasons, real estate nationwide could enter a supercycle soon, and nowhere more than in Brooklyn will it be felt. The sky looks bright for it, as it still has much room to grow. As a long-time New Yorker and Brooklyn investor, this feels tremendous. New York had been out of favor for so long, and now Brooklyn is leading its renaissance. Those who stuck the course know.
Excelsior (New York motto, meaning “ever upward” in Latin).
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.
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