Long Beach, once known as a blue-collar port city catering to manufacturing jobs, is sleepy no more. The rising tide of the Los Angeles residential real estate market has lately led a flock of investors to the city, located on the southern end of the county.
Many small-scale, private investors are descending on the coastal submarket because of its appealing returns, CoStar reported. Multifamily investors did nearly $1 billion in sales in Long Beach over the last year, setting a new record for the South Bay city. The sales included almost 450 multi-family homes.
Since the first quarter of 2018, another 135 sales have closed in the Long Beach/Ports submarket, reflecting the increased interest in the neighborhood. Unit prices have doubled in Long Beach since 2014, and average cap rates dropped by around 200 basis points.
Apartments in the region are trading at an average of $260,000 per unit, with average cap rates around 4.5 percent. For comparison, the average price-per-unit in trendy Santa Monica is over $400,000, while average cap rates dropped below 3.5 percent.
The biggest trade in Long Beach the past year was the sale of the 223-unit Current, which sold for $133 million in July. Other big-ticket deals in the neighborhood include the $85 million sale of the Westin Long Beach, as well as Greystar Real Estate Partner’s $84 million purchase of the Pacific Court Apartments. [CoStar] — Natalie Hoberman