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.

The 2026 interest rate for qualifying security deposits at Los Angeles RSO properties is 3.03%. Here is what multifamily owners should know.

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

One thing I don't think enough people are talking about: The buyer pool for LA multifamily may be considerably bigger in the next 6 to 18 months. Once the lock-up periods expire and liquidity events occur at companies like SpaceX, Anthropic, and OpenAI, there will be a massive amount of new wealth created, especially here in California. If you're a tech employee who suddenly has a few million dollars of liquid net worth, LA multifamily starts to look pretty attractive. You ca

The biggest risk in LA multifamily today isn’t interest rates, rent control, or new supply. It’s habitability claims. The tough part is this: There doesn’t even need to be a real habitability issue to get pulled into a sizable lawsuit. We’re seeing more tenant attorneys actively targeting buildings, finding small issues, and turning them into leverage. Most owners don’t realize how exposed they are until they’re already dealing with it. This is no longer just a legal issue. I

100% of the time I only sell Los Angeles apartment buildings. I don’t try to cover other product types, and I don’t try to cover other markets outside of Los Angeles. In LA where every deal is hyper local and constantly shifting, being fully focused matters. I get calls all the time to sell office, retail, or assets outside of Los Angeles and I say no. Not because I can’t do it, but because my clients are better served when I stay focused on what I actually specialize in. Bei

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

What Comes Next for LA Multifamily Investors After the City Council’s RSO Vote? The November 12th City Council vote is yet another reminder of how complex it has become to operate multifamily assets in Los Angeles. Capping annual rent increases at 90% of CPI makes little economic sense when core operating expenses—property taxes, utilities, insurance—continue rising regardless of inflation. Expenses such as insurance and sewer fees move entirely independent of CPI, so tying a

Where are the Good Deals? Los Angeles County currently has a massive amount of inventory across nearly every submarket. As of today, there are 1,279 multifamily buildings on the market. The first quarter of 2025 was quiet, with only 320 transactions—a significant drop from 477 deals in Q4 2024. The wildfires earlier this year contributed to a “pencils down” environment among many buyers. However, select listings are gaining strong momentum—especially well-located value-add pr

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

Lower-cost submarkets on solid footing. Amid a period of household budget tightening, local apartment fundamentals point to strong...

Mortgage rate plunge fails to stoke buyer demand. Existing home sales decreased by 3.3 percent year over year in August 2024 to an...

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

Higher mortgage rates influence buyer and seller motivation. The average 30-year fixed-rate mortgage climbed to a five-month high of 7.0...

Robust Demand Momentum The multifamily sector experienced substantial demand growth in the first quarter of 2024, with a record-breaking...