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.

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

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

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

Single-family accounts for a growing share of development. Multifamily and single-family construction trends are moving in opposite...

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...

Understanding the ever-changing economic landscape is crucial for both individuals and businesses. In this blog post, we delve into...

As we navigate the ever-changing economic landscape, understanding key indicators like inflation and housing dynamics becomes crucial. In...

When Will the Bid - Ask Spread Narrow? Over the past six months the bid - ask spread has continued to increase with buyers desiring a cap rate closer to the cost of debt and sellers remembering their building was a 3% cap less than two years ago. Some sellers are getting more realistic as there have been some recent sales trading sometimes one third off their original list price. The average listed cap rate in the core markets of LA is 4.7%, which is the highest we have seen

Where are Interest Rates Now for LA Multifamily? Many lenders have programs in the mid to high 5% range which is around 50 basis points lower than the last quarter when we saw inflation growing at a higher rate. Wall Street and overall commercial real estate industry are underwriting for higher rates longer term than was expected months ago. Many analysts are expecting the federal funds rate to cap out in the 5% range. This is still another 50 - 100 basis points from where we

How High are Cap Rates on LA Rent Control Multifamily? Within the past 90 days throughout all of Marcus & Millichap closed rent control LA multifamily the average cap rate is still very low at 4.25%. The highest closed cap rate was 6.7% with the lowest at 2.72%. It is impressive to consider how low the average cap rate is even when buyers were closing on locked in debt from 30–45 days ago in the low 5% interest range. Currently interest rates are in the low 6% range with the

Hiring continues, but signs of slowdown emerging. The labor market welcomed 263,000 new jobs in September, above the long-term monthly...