NEW YORK CITY—A new Brooklyn CAP and GRM report is available from GFI Realty, and the firm says it demonstrates the resilience of the New York real estate investment market.

“During one of the most tumultuous economic time periods, Crown Heights has demonstrated a tremendous amount of growth and appreciation, making it an ideal area to represent the meteoric rise of certain neighborhoods in Brooklyn, said GFI president Michael Weiser. “In contrast, there are other areas, such as Flatbush, that were comparably stable during the same time period.”

The report provides a comprehensive look at the relationship between the fluctuations in CAP rates and GRMs in Brooklyn from 2007 to 2014. It also puts the Brooklyn picture into its context of the rest of the city.

From boom to bust to recovery, NYC Real Estate remained strong, and the Brooklyn market has proved especially healthy. In 2003, the median GRM was between eight and nine times the rent roll; by Q1 of 2014, it had hit peaks as high as 15 times.

During the same time period, the average price per unit of Brooklyn apartments more than doubled, climbing from $80k in 2003 to $200k at the close of 2013; the median price per unit numbers similarly jumped from $83K to $150K in the same time period. While correction cycles lowered the average price per unit from $150K per unit to $98k in Q3 2008, the prices rebounded in 2010.

The report uses two neighborhoods—Crown Heights and Flatbush—to demonstrate that not all markets are alike in Brooklyn.

In the case of the Crown Heights section of Brooklyn, the change between 2007 and 2014 is quite remarkable. While several Brooklyn neighborhoods, including Williamsburg, Fort Greene, Bedford-Stuyvesant and Bushwick, underwent notable changes in this time period, the story of Crown Heights is particularly illustrative of the capital investment flowing into the market, and the multiple market swings that have occurred in these gentrified areas.

The study analyzed a sample of 91 multi-family buildings in Crown Heights. For each year between 2007 and 2014, GFI selected 10-13 buildings that were traded in that year. In order to maintain par in the set, we only studied properties with the following criteria:

• The properties were constructed in, or prior to, the 1980s

• The properties had between 30-50 units (without any retail or commercial components)

• The properties were between 40,000-50,000 square feet

Analysis of the data provides insight into the repeated directional changes in pricing over this short period of time. While in 2007, as the market reached its peak, the average price per unit was $112K, the 2008 market crash more than halved valuations, lowering average prices to $43K. After the Great Recession, the market recovered steadily, with price per units reaching an average of $175K by 2014, exceeding the average price per unit during the “height” of the market in 2007.

For further information about the Brooklyn study, visit www.gfirealty.com.