New home. Same Value.

Note: I am no longer with Kidder Matthews and have launched my own commercial real estate sales advisory group, Investment Property Advisers. LA Multifamily insights will continue to be issued through the Investment Property Advisers banner. If you have any investment real estate questions or needs, feel free to reach out at [email protected] or at (310) 804-3829 (cell).

Market Sales Activity

As of the writing of this newsletter, there have been 1,192 Multifamily sales transactions year to date, or approximately 120 a month-or 56 more than last year this time. At the last publication of this newsletter, there were approximately 150 properties that were in escrow that closed. Investor demand and optimism has increased for multifamily in several sub markets in Los Angeles, notably the San Fernando Valley and the South Bay. Outside of Los Angeles County, demand is high in Orange and San Diego Counties. In Los Angeles, investor sentiment is cautious weighing the outcome of Proposition 33.

Notable Sales Transactions since September:

- On October 1st, Investment Management company Faring sold 21207 Avalon Blvd-Imperial Avalon Mobile Estates a mobile home park in Carson, CA to home builder Lennar and institutional investor TPG Angelo Gordon for $101,935,000.

-On September 27th , ?New York Investment Firm DLJ Real Estate Capital Sold Arrive Hollywood, a 535 unit apartment building built in 2014 to San Francisco based investment firm FPA Multifamily for 191m, or $357,000 per unit.

-On September 28th, South Bay based developer and investor Wedgewood sold Stadium Village Apartments in Inglewood CA to San Diego Affordable Housing Investor Community Housing Works for 26.9m or $336,250 per unit. The buyer is planning to convert the property from market rate housing into deed restricted affordable housing at the 80% AMI level for LA County.?

On September 17, Chicago based mobile home park investor Hometown America purchased Point Dume Club, a 297-unit MHP in Malibu for 200 million, or $673,401 a unit. The sellers owned the property for four generations dating back to 1892 and felt that it was time to sell the property.

On September 17th, 2024, MWest Holdings and Pacific Oak Capital Advisors sold the 292-unit multifamily property known as Lofts at Noho Commons to Goldstein Planting investments for $92.5 Million, approximately $316,781 per unit.

November Regulation: Vote No on Prop 33 and Yes on 34

If you live in California, (and you watch television) you’ve been deluged by television advertisements saying vote no on Proposition 33, which threatens to undo vacancy decontrol which has drastic implications for investment property owners if passed. Luckily according to most polls, it is behind by as much as a few points and a high as twelve depending on which poll you rely on. The important thing to do between now and the election is to inform family members and friends who may not be in the property investment/management/brokerage business to vote no on Prop. 33 as well.

Proposition 34 California require certain participants in Medi-Cal Rx Program to Spend 98% of Revenues on Patient Care Initiative (2024); this is another important legislation that needs to be voted on In an affirmative manner.

Los Angeles MSA Development Pipeline

Upcoming development projects in the Los Angeles area

1.?????? Alloy, a 475-unit mixed use 35 story high rise development in the Arts District that is scheduled for completion by the end of the year, built by Bay Area development/investment firm Carmel Partners-it will be interesting to witness demand for class A office and multifamily in a downtown submarket that has been battered since the onset of the pandemic. ?

2.?????? Destination Crenshaw: Sankofa Park is scheduled to open for the public in the median of Crenshaw Boulevard just south of Leimert Park. It's the first major component of Destination Crenshaw, a 1.3-mile public art and open space project which will flank the at-grade section of the K Line. Similar parks are set to follow soon along the corridor between Vernon Avenue in the north to 60th Street in the south.

3.?????? Times Mirror Square: Omni Group Plans call for the construction of?37- and 53-story buildings featuring 1,127 apartments above 34,000 square feet of ground-floor commercial space and a 1,700-car garage (across the street from the Historic Broadway subway station). Construction is slated for completion in 2027.

4.?????? Hard Rock Hotel Long Beach: In Summer 2024, Steinhauer Properties is aiming to break ground on the Hard Rock Hotel Long Beach at?100 N. Ocean Boulevard . The proposed 31-story development, which would feature 427 guest rooms. Upon completion it would be amongst one of the tallest buildings in Long Beach.

5.?????? LAX/Metro Transit Center Station: Another key addition to the ground transportation scene at LAX is the new LAX/Metro Transit Center Station - the $900-million light rail stop which is being built to serve the C and K Lines.?

Summary

The Los Angeles County multifamily market is still reeling from multiple rate increases and increased operating expenses, as well as concerns over the passing of Proposition 33 in November. Despite this, institutional developers and investors have increased activity while smaller investment groups have pulled back. We will have a better understanding of what the multifamily market’s health in 2025.

As always if you have any questions regarding the Los Angeles commercial real estate market or have interest in buying or selling multifamily in Los Angeles county, don’t hesitate to real out by phone at (310) 804-3829 or at [email protected] .