Multifamily investors placed big bets on discounted properties across Los Angeles County this year, with a scant few of those buyers paying more in 2024 than the previous time the same building traded hands.
Sales volume for the sector plunged in the second half of 2023 and is yet to resurface. By the end of the third quarter of 2024, $3.1 billion worth of multifamily deals took place across the Greater Los Angeles market, a 3 percent decline from the same period the previous year, according to a report by Colliers.
The shock waves from Los Angeles’ new 5.5 percent “mansion tax” on deals greater than $10.3 million reverberated across the market, dampening sales activity, especially when combined with the high cost of borrowing the last two years, according to landlords and brokers.
Perhaps the biggest opportunist this year was FPA Multifamily, which swooped in on two of the top 10 multifamily deals across the county, paying just over $350,000 per unit for Downtown properties it acquired months apart at 888 South Hope Street and 232 East 2nd Street. FPA also snapped up the $191 million ground lease for Arrive Hollywood, a 535-unit apartment building at 6201 Hollywood Boulevard, from DLJ Real Estate Capital Partners in September.
Suburban markets east of Los Angeles such as Monrovia and Pomona also appeared on the top 10 list, with CP Capital handing off its recently completed college-friendly development in North Pomona to Prime Residential for $115 million in October.
Average multifamily cap rates in Los Angeles climbed above 4 percent early last year and stayed there, peaking just below 6 percent in the middle of 2024, according to a report by CBRE.
The 10 biggest multifamily deals in 2024 ranged from $67.7 to $186 million, according to The Real Deal’s analysis. The list below includes individual property sales that took place over the last 12 months, and excludes portfolio sales and ground lease deals.
Data for the list came from TRD reporting and a TRD analysis of Kidder Mathews quarterly report for the first three quarters of 2024.
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888 South Hope Street | FPA Multifamily | $186 million
CIM Group’s 34-story luxury highrise in Downtown Los Angeles was on the market for eight months before FPA Multifamily came forward with the winning offer in the county’s largest multifamily deal of 2024. The San Francisco-based investment firm run by Managing Partner Gregory Fowler bought the 525-unit tower in March for $186 million, $50 million less than its initial asking price.
The price works out to $354,000 per unit.
CIM completed 888 South Hope Street in 2018, and has several other developments underway around Los Angeles, including the 190-unit Hollywood apartment building at 6007 West Sunset Boulevard and a smaller 36-unit complex at 1915 West Park Avenue in Echo Park.
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Reveal Playa Vista | DivcoWest | $122 million
DivcoWest bought Clarion Partners’ ritzy Silicon Beach apartment complex Reveal Playa Vista in May for $122.1 million, or about $570,000 per unit. That’s more than the $117.5 million the New York firm paid for the 214-unit property in 2018, but not by much.
Clarion undertook $14.4 million in upgrades to the 21-year-old complex, located at 5710 East Crescent Park, beginning in 2019. It was able to “significantly” increase rents in the interim, according to its website. One-bedroom apartments at the property currently start at $3,160, according to a marketing website.
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The Gabriel | Prime Residential | $115 million
Two years after CP Capital and Greystar completed The Gabriel, a 312-unit multifamily development in North Pomona, Prime Residential snapped it up in October for $115 million, or $368,590 per unit. CBRE provided a $74.8 million loan for the acquisition.
The deal on the eastern edge of L.A. County brought Prime out of its usual stomping grounds. The firm owns Park La Brea, a 4,500-unit rent-controlled apartment community near Miracle Mile. Prime scored a $947 million loan from Freddie Mac in 2023 to renovate the 144-acre property and add accessory dwelling units.
CP Capital and Greystar’s project at 2771 North Garey Avenue in Pomona fell behind schedule, due to construction delays during the pandemic. But it rented up quickly once complete in 2022, reaching 94 percent occupancy in the college-friendly town this fall, according to CoStar data.
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Silva | Silver Lake | $110 million
Los Angeles-based Cityview and Wafra, the global investment arm of Kuwait’s public pension fund, teamed up in August to buy Silva, a 221-unit hilltop development at 235 North Hoover Street in Silver Lake, for $110.3 million, or $498,869 per unit.
The deal closed before developer Gemdale USA — which acquired the site in 2016 — had the chance to welcome its first tenants. Cityview and Wafra will handle leasing at the newly constructed property, which is among the largest multifamily properties in Silver Lake.
Cityview CEO Sean Burton said in a statement the deal posed a “rare opportunity” to acquire a new development in the neighborhood named for the reservoir and 3-acre park at its center. Last year the firm completed Jasper, a 296-unit apartment complex in University Park that benefits from the federal Opportunity Zone tax incentive program.
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Lofts at Noho Commons | GPI Companies | $92.5 million
GPI Companies bought the conspicuous Lofts at Noho Commons in September for $92.5 million. The three-story North Hollywood building at 11179 Weddington Street is adorned with a 15,000-square-foot whimsical mural by Thierry Noir.
The artwork was commissioned in 2017 by the property’s previous owners, Los Angeles-based MWest Holdings and KBS Strategic Opportunity REIT II, a real estate investment trust headquartered in Newport Beach.
MWest and KBS paid $102.5 million for the 292-unit building in 2016 and took a $10 million dollar hit in the deal with the 16-year-old GPI, which valued the property at $316,781 per unit.
James Rodgers, head of acquisitions at GPI, said in a statement after the sale closed that the firm saw the building as a value-add opportunity.
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Paragon at Old Town | SCS Development | $87 million
Bay Area builder SCS Development showed up on Southern California’s radar this year with a multifamily deal in Monrovia. SCS paid Sequoia Equities $87.3 million, or $535,276 per unit, for the 163-unit apartment complex at 700 South Myrtle Avenue in the San Gabriel Valley city east of Los Angeles.
The deal, which closed in August, came after average rents crept up 25 percent since the same time in 2023 in the suburban market, as TRD previously reported.
The property, named Paragon at Old Town, was more than 97 percent occupied at the time of the sale, according to Institutional Property Advisors’ Joseph Grabiec, who brokered the deal for Sequoia along with Kevin Green and Gregory Harris.
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Arrive Wakaba | FPA Multifamily | $86 million
FPA Multifamily chased down more than one bargain in L.A.’s multifamily market this year. Five months after buying 888 South Hope Street, FPA paid JPMorgan $86.1 million, or $358,750 per unit, for Arrive Wakaba, a 240-unit apartment building at 232 East 2nd Street between San Pedro and South Los Angeles streets in L.A.’s Little Tokyo.
JPMorgan’s asset management arm bought the seven-story property for $116 million in February 2020, and apparently didn’t want to hang onto it. The deal pencils out to roughly the same price-per-unit FPA paid for the 34-story 888 South Hope Street tower seven blocks south in Downtown Los Angeles.
Véda | Abacus Capital Group | $72.5 Million
New York-based investment firm Abacus Capital Group went looking for a deal in Los Angeles and found what it was looking for in Sherman Oaks.
Abacus bought Véda, a 236-unit apartment complex at 4735 Sepulveda Boulevard, from Arizona firm Alliance Residential in April for $72.5 million, or $307,203 per unit.
Alliance acquired the property for $81 million in 2016 and sold it at a discount to Abacus. The New York firm owns a few other apartment buildings in the Greater L.A. region, including the 138-unit Atrium at West Covina and the Eton Warner Center, a 298-unit apartment property in Canoga Park.
The Highlands | Koto Estate | $71.5 Million
Tokyo-based investment firm Koto Estate Company landed one of the year’s biggest multifamily deals in the South Bay.
Peter Bohlinger’s Ocean Ten sold the 121-unit apartment complex at 25909 Rolling Hills Road in Torrance to Koto in September for $71.5 million, or $590,909 per unit, as TRD previously reported.
Bohlinger’s firm bought the property in 2022 for $49.5 million and remodeled the units while also adding some new ones. The complex grew in size from 107 to 121 units at the time of the deal with Koto. It has since been rebranded at The Highlands, and this year’s sale values the property well above South Bay’s average multifamily sale price-per-unit of $316,000.
Cobalt | Helio Group | $67.7 million
Simon Lazar and Sam Mostadim’s Helio Group bought the 135-unit Cobalt Apartments from Greystar in February for $67.7 million, or $502,000 per unit.
The luxury apartment complex at 10601 Washington Boulevard in Culver City is just across the street from a 184-unit residential development Helio got underway last year at 10505 Washington Boulevard.
Greystar saw a nice return on its investment, as far as the property’s sale price is concerned. The firm paid $23.4 million for the property in 2014.