Question 1

How much does an apartment building cost in Santa Monica?

Accepted Answer

Santa Monica apartment buildings average $518,000 per unit across the LAAA Team's 19 apartment sales among 21 closed transactions, totaling $79.8M in volume. Oceanfront and Montana Avenue properties can exceed $600,000 per unit, while properties south of Wilshire and east of Lincoln Boulevard offer somewhat lower entry points in the $400,000-$500,000 per unit range.

Question 2

What is the average cap rate for Santa Monica apartment buildings?

Accepted Answer

Cap rates in Santa Monica average 3.92% across Santa Monica's 18 apartment sales with a recorded cap rate. The compressed yields reflect the highest demand and most restrictive supply conditions in LA. Santa Monica's rent control ordinance creates deeply below-market rents in many buildings, and the true economic cap rate at market rents is often 200+ basis points higher than the going-in rate.

Question 3

How does Santa Monica rent control work?

Accepted Answer

Santa Monica has its own rent control ordinance separate from the LA RSO, administered by the Santa Monica Rent Control Board. It applies to buildings with 2+ units built before April 10, 1979, with annual rent increase limits that are typically lower than the LA RSO. Costa-Hawkins vacancy decontrol still applies, allowing market-rate resets upon turnover, which is the primary value-add mechanism for Santa Monica apartment buildings.

Question 4

What are the best Santa Monica neighborhoods for apartment investment?

Accepted Answer

Properties along Ocean Avenue, Montana Avenue, and the blocks between Wilshire Boulevard and Santa Monica Boulevard command the highest per-unit pricing in the city, routinely exceeding $600,000 per unit for oceanfront and Montana-adjacent buildings. Mid-City Santa Monica south of Wilshire toward Pico Boulevard offers more accessible entry points while retaining proximity to Silicon Beach employers. Sunset Park and the blocks near Main Street provide quieter residential settings with strong family-renter demand. All neighborhoods benefit from the city's rent control regime and extreme supply constraints that compress vacancy across the market.

Question 5

How does Costa-Hawkins vacancy decontrol work in Santa Monica?

Accepted Answer

California's Costa-Hawkins Rental Housing Act permits vacancy decontrol on rent-controlled units, meaning when a long-term tenant voluntarily vacates, the landlord may reset that unit's rent to current market rate. In Santa Monica, where controlled rents frequently sit 40-60% below market, vacancy decontrol is the primary value-add mechanism in apartment investment. Over a multi-year hold period, natural turnover gradually resets units to market rates, producing meaningful cash flow growth without requiring capital expenditure beyond routine unit refresh at turnover.

Question 6

Can I sell a Santa Monica apartment building while it has tenants in place?

Accepted Answer

Yes. Most Santa Monica apartment sales transfer buildings with existing tenancies in place at their current rents, since the long-term upside from Costa-Hawkins vacancy decontrol is a core part of the buyer's investment thesis. Due diligence typically covers rent rolls, lease terms, security deposit liabilities, and any outstanding tenant-related issues. The LAAA Team coordinates buyer tours and inspections in compliance with California tenant rights laws, which require at least 24 hours' advance written notice for entry under Civil Code 1954.

Year ↓	Address	City	Type	Units	Price	Cap Rate	$/Unit
2025	3205 Ocean Park Blvd	Santa Monica	Apartments	6	$7,000,000	—	$1,166,667
2022	1528 10th St	Santa Monica	Apartments	8	$3,350,000	4.20%	$418,750
2022	1540 7th St	Santa Monica	Apartments	8	$6,050,000	3.87%	$756,250
2021	1753 9th St	Santa Monica	Apartments	7	$5,100,000	4.30%	$728,571
2021	2224 Oak St	Santa Monica	Apartments	6	$2,700,000	4.06%	$450,000
2021	1434 10th St	Santa Monica	Apartments	10	$5,900,000	4.79%	$590,000
2021	2850 Delaware Ave	Santa Monica	Land	—	$1,800,000	—	—
2021	707 Strand St	Santa Monica	Apartments	5	$2,145,000	4.80%	$429,000
2020	2721 6th St	Santa Monica	Apartments	22	$10,100,000	4.07%	$459,091
2020	2683 34th St	Santa Monica	Apartments	12	$4,100,000	5.27%	$341,667
2020	1846 10th St	Santa Monica	Apartments	10	$4,400,000	4.57%	$440,000
2020	848 19th St	Santa Monica	Apartments	6	$3,750,000	3.22%	$625,000
2020	1111 12th St	Santa Monica	Apartments	7	$2,750,000	3.27%	$392,857
2019	1927 Cloverfield Blvd	Santa Monica	Apartments	4	$3,075,000	4.24%	$768,750
2019	2120 Lincoln Boulevard	Santa Monica	Land	—	$5,250,000	—	—
2019	2416 20th St	Santa Monica	Apartments	5	$2,052,000	4.48%	$410,400
2018	1537 Centinela Ave	Santa Monica	Apartments	7	$2,600,000	3.22%	$371,429
2018	3211 Colorado Ave	Santa Monica	Apartments	4	$1,875,000	3.45%	$468,750
2018	1537 Centinela Ave	Santa Monica	Apartments	7	$2,400,000	2.62%	$342,857
2018	1802 Delaware Ave	Santa Monica	Apartments	5	$1,580,000	2.41%	$316,000

Santa Monica Apartment Building Sales

Santa Monica Multifamily Market Overview

Market Snapshot

Rents by Unit Type

Investment Activity (Trailing 12 Mo)

Santa Monica Market Area

LAAA Team Closings in Santa Monica

Recent Deal Stories

1528 10th St

1753 9th St

2224 Oak St

Santa Monica Multifamily Investment FAQs