3 Units | Los Feliz | All Cash Buyer | 13 Day Escrow
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The successful closing of 2900 Griffith Park Blvd, a 3-unit multifamily property situated in prime Los Feliz, one of the most sought-after neighborhoods of Los Angeles. This is the first time the subject property has been sold in more than 20 years.
State of the Los Angeles Multifamily Market
We've all read the headlines as of late, so we won't waste time repeating that, but we did want to share our thoughts on the current market from the viewpoint of one of the most active multifamily brokers in Los Angeles.
With interest rates in the mid-to-high 5% range, and Seller's price expectations still lagging behind buyers' willingness to pay, most deals offered on the market are still priced below a 5.0% CAP rate. That means buyers are forced to consider buying apartment buildings with negative leverage (interest rate higher than the CAP rate). Negative leverage kills the buyer's cash-on-cash return which is why there are far fewer deals being sold this year.
To demonstrate how much these interest rates have killed buyers' cash on cash returns, here is the difference in cash flow for a buyer on a property being sold at a 4.0% CAP rate and the buyer gets a 50% loan-to-value:
The successful closing of 2900 Griffith Park Blvd, a 3-unit multifamily property situated in prime Los Feliz, one of the most sought-after neighborhoods of Los Angeles. This is the first time the subject property has been sold in more than 20 years.
State of the Los Angeles Multifamily Market
We've all read the headlines as of late, so we won't waste time repeating that, but we did want to share our thoughts on the current market from the viewpoint of one of the most active multifamily brokers in Los Angeles.
With interest rates in the mid-to-high 5% range, and Seller's price expectations still lagging behind buyers' willingness to pay, most deals offered on the market are still priced below a 5.0% CAP rate. That means buyers are forced to consider buying apartment buildings with negative leverage (interest rate higher than the CAP rate). Negative leverage kills the buyer's cash-on-cash return which is why there are far fewer deals being sold this year.
