Apartment Cap Rates Creep Higher in Los Angeles & the Country’s Top Markets!

Multifamily investors continue to pay high prices for new acquisitions and accept historically low yields. Average multifamily cap rates have been historically low for some time and fell even further in the first half of 2019.

There are a handful of markets, however—New York City, San Francisco, Los Angeles and Chicago—where multifamily cap rates have inched higher.

In Los Angeles, cap rates averaged 4.4 percent, up 20 basis points from the year before.

But cap rates tightened by 10 basis points in Orange County to average 4.2 percent. Cap rates also tightened 20 basis points in the Inland Empire submarket to average 5.1 percent, according to RCA.

Long-term interest rates have fallen sharply since the beginning of 2019—and that might push cap rates even lower, especially in top apartment markets.

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