1920’s 8-Unit Apartment Building Sells to Local Developer
We recently sold 1400 S. Wilton Place which was a classic value-add apartment building located in Arlington Heights near the intersection of Pico and Arlington.
Changing Market Dynamics: This sale is an illustrative example of the changing market dynamics of The LA Multifamily market within the past 2-3 years. We first listed this property in 2021 when the cost of borrowing significantly lower than current conditions. During that time, we generated 9 offers with a few at asking price. The Sellers ultimately did not transact for personal reasons. Flash forward to 2024 where we were in the thick of an elevated interest rate environment and there were significantly fewer buyers in the market.
The Heightened Regulatory Environment: LA is arguably the most regulated rental market in the country for landlords and much of the Seller’s motivation had to do with the heightened and continuous regulatory measures pertaining to LA rent controlled apartment buildings.
The Basis Buy: The purchaser, who owns and operates apartment buildings throughout Los Angeles, was most interested in the low Price per Square Foot basis of $180/SF which is ~20% less than other similar multifamily properties trading in the area.
The Final Deal Metrics
Below are the final deal metrics for 1400 S. Wilton Place:
- $1,915,000 Sale Price
- 8 Units
- $239,375 price per unit
- $180 per SF
- 11.0 GRM
- 5.3% 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
