Elevated interest rates have created uncertainty, but they have also pushed Los Angeles multifamily properties to basis levels not seen in years. Here’s why today’s market could offer a compelling long-term opportunity.

Multifamily inventory is outpacing sales across several Los Angeles submarkets, increasing competition among sellers and reinforcing the importance of realistic pricing.

The Tuvia Group’s Los Angeles multifamily market update examines Q3/Q4 2026 cap rates, new housing supply, transaction volume, loan resets and emerging acquisition opportunities across key submarkets.

Why this continues to support multifamily demand.

Why inflation remains a key tenant concern.

The U.S. housing market continues to send mixed signals. While affordability has improved modestly thanks to steady wage growth and relatively flat home prices, new-home demand has slowed considerably. At the same time, residential construction activity has fallen to its lowest level since 2020, creating conditions that could benefit apartment owners over the next several years. One of the most notable trends is the shrinking construction pipeline. Residential housing starts

The Federal Reserve continues to take a cautious approach, holding interest rates steady as policymakers weigh persistent inflation against signs of a slowing labor market. While the Fed remains open to future policy adjustments, most market participants expect rates to remain unchanged for the rest of the year. Uncertainty surrounding inflation, global energy markets, and economic growth continues to influence borrowing costs. According to Marcus & Millichap, these condition

A week ago, the Los Angeles Controller’s Office released what it called the “Top 100 Rental Properties” list in LA. As I started going through the addresses, I noticed something interesting. I recognized many of the properties not because I was involved in them, but because a surprisingly significant number of them have traded over the past few years. Roughly 16% of the buildings on the list have sold within the last 4 years. That raises a bigger issue. Instead of focusing on

The ADU Parking Tradeoff in LA Multifamily A lot of LA multifamily owners are adding ADUs right now, but there’s no clear consensus on the best strategy. I’m seeing two very different approaches: Some owners are eliminating parking entirely to maximize unit count Others are adding a few ADUs while preserving most of their existing parking There’s no “right” answer. It’s a classic short-term vs. long-term tradeoff. Short term: Units without parking are generally harder to leas

A new construction multifamily investor came into my office this week to hear our marketing pitch on the value of one of his Hollywood buildings. After I shared the valuation, he pulled up ChatGPT and said: “Chat told me cap rates are between 4–5%, not 6% for new product.” What I took from that: Chat and any AI model is only as good as the data you give it. With no real inputs, it can actually hurt valuations and underwriting. Especially in a market like LA where everything i

Has Los Angeles Been Derisked? With the election behind us and vacancy control now defeated for the third time by a large margin, local multifamily transactions should begin to normalize. The risk of New York style vacancy control is in the rearview mirror allowing buyers to come back to value-add opportunities. For most of 2024, upside and value add were pretty much gone as buyers were focusing on just current cash flow and would hesitate to underwrite rental upside through

What is SB1211 & How Does it Impact my Multifamily Portfolio? SB1211 allows up to 8 additional ADUs on multifamily properties not to exceed the current unit count. For example, if you have a 5 unit building you could, under SB1211, add an additional 5 units. This is very positive for buyers having a tougher time underwriting Los Angeles multifamily with higher interest rates. The most ideal multifamily properties to take advantage of the density allowed by SB1211 would be pro

Labor market moving closer to equilibrium even amid strong hiring. Total employment increased by 272,000 in May, coming in above the...

Is LA Multifamily Trading? In the first quarter of 2024, 3,041 units were sold, which is pretty much on par with the number of units sold during the first quarter of 2009 when the capital markets were frozen. Los Angeles multifamily is unique to other markets as the disastrous ULA transfer tax is to blame for the larger sales declines in the marketplace. The median sales price for multifamily over 5 units in LA County during the first quarter was $2.15 million. It is interest

More Prospective Buyers and Sellers Coming to Terms The number of existing single-family homes available for purchase swelled to a...

Inflation Trends Cloud Fed's Path Still-elevated inflation is leading Wall Street participants to delay expectations for the Federal...

Rising Unemployment Releases Pressure on Inflation Employment growth accelerated in February with 275,000 jobs created, yet the...

As we step into a new year, understanding the intricacies of the labor market is pivotal for grasping broader economic trends. In this...

What Rent Increase are We Getting for RSO Units? After four years of no rent increases, the LA city council had a hearing to freeze rent increases another 6 months to July which was thankfully shut down. Starting in February 2024, landlords will be allowed a 4% rent increase on units under RSO. The original proposal was for a 7% rent increase which many believe really should have been a 10%+ increase to make up for significant increases in expenses since 2020 while rents rema

Inflation Continues to Show Varied Trends The headline consumer price index (CPI) showed a slight uptick in July, rising by 3.2 percent...