Just Closed – Prime West LA 9-Unit Near Wilshire/Bundy

1237 Amherst Avenue sells to a local apartment investor in an All Cash Transaction.

Through a challenging market with sales volume down from the highs of 2021/2022, as well as pending ballot measures (Proposition 33) hanging in the balance, we were able to close a “Bread-and-Butter” apartment transaction located at 1237 Amherst Avenue in prime West Los Angeles.

General Feedback From the Market

The general feedback from the diverse pool of prospective purchasers was typical for a West LA transaction such as this one, highlighted in few bullet points below:

• “Love the Location”: Some investors chase yield at the expense of location – while other investors chase location at the expense of yield. 1237 Amherst is an example of the latter – situated on a quiet side street near the iconic intersection of Wilshire Blvd and Bundy Drive in prime West Los Angeles. This is arguably one of the most well-established and highly sought-after rental submarkets for young ‘Westside’ professionals.
  
  
• “Excellent Rents, But Where is the Upside?”: The property was performing well with an average rent of ~$2,500/month. The near-stabilized rents achieved by the Seller ruled out the traditional ‘value-add’ investors who generally seek properties with lower rents and higher upside. 1237 Amherst was geared more towards an investor seeking a cash-flowing asset in an A+ location, who for the most part would be parking money for appreciation over the long term.
  
  
• “Let’s See What Happens with Prop 33”: Over the past few months, many investors remained on the sidelines anxiously awaiting the results of Prop 33 which could have introduced the concept of Vacancy Control (ie the government regulating rents in-between tenancies). We were able to successfully consummate this transaction while the fate of Prop 33 lingered in the balance. Prop 33 has since been defeated by California voters.
  
  

Healthy Buyer Interest with Multiple Offers Generated

Through the marketing process, we attracted attention from some of the most active buyers in the West LA market – both large and small.

• All Cash Transaction | 20 day Total Escrow: With the uneasiness of the capital markets still pervasive, the purchaser closed all cash with a lightening fast 20 day total Escrow period from start to finish.
  
  
• The terminal buyer was a smaller operator who owned a few apartment buildings in the immediate vicinity.

The Final Deal Metrics

Below are the final deal metrics for 1237 Amherst Avenue:

• $3,426,000 Sale Price
• 9 Units
• $380,667 price per unit
• $492 per SF
• 12.8 GRM
• 4.7% cap rate

We are currently evaluating similar Los Angeles individual properties and portfolios for local owners. If you would like more information on how we may assist, please reach out to me at ewong@greysteel.com

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