Small-scale investors flocking to Long Beach seeking high returns

The submarket witnessed nearly $1B in sales in the past year

Los Angeles /
May.May 17, 2018 02:30 PM
Long Beach (Credit: Wikimedia Commons)

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


Related Articles

arrow_forward_ios
Kings Villages (Rent.com)
Jonathan Rose Companies buys Pasadena complex for $223M
Jonathan Rose Companies buys Pasadena complex for $223M
Red Oak Investments' Alex Wong and A-1 Trailer Park (Google Maps, Red Oak)
Presto on PCH: apartment developer plans to make trailer park disappear
Presto on PCH: apartment developer plans to make trailer park disappear
600 East Broadway (SRS)
$43M price check at Vons supermarket in Long Beach
$43M price check at Vons supermarket in Long Beach
Long Beach could bolster inclusionary housing law
Long Beach could bolster inclusionary housing law
Long Beach could bolster inclusionary housing law
603 Mariposa Avenue and Housing Diversity Corporation's Brad Padden (Google Maps, Housing Diversity Corporation)
Seattle micro-housing developer extends LA push in Koreatown
Seattle micro-housing developer extends LA push in Koreatown
$163M for Laguna Niguel apartment complex
$163M for Laguna Niguel apartment complex
$163M for Laguna Niguel apartment complex
Will Tiao of Tiao Properties with the site of the development (Google Maps, Tiao)
Developer sees tear-down, build-up in Boyle Heights
Developer sees tear-down, build-up in Boyle Heights
BH investor goes Hollywood in link with construction vet
BH investor goes Hollywood in link with construction vet
BH investor goes Hollywood in link with construction vet
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...