SoCal Multifamily Sales Pulse - October 17, 2021 - October 23, 2021
Disclaimer: All information contained herein is obtained from sources believed reliable. We have not verified it and make no guarantee, warranty or representation about it. Any projections, opinions, assumptions or estimates used are for example only. We make no claim(s) as to the accuracy or reliability of the information presented. If you wish for us to analyze your specific property or situation please feel free to call or email us anytime.
Here's What's Happening In The Market, Here’s What This Means For You
With Investors Flocking to Certain Assets, What is the Next Value Play for CRE?
As time goes on and cap rates continue to fall, we’re seeing a lot of multifamily investors move to other investments or out of state in order to find value. Some investors are becoming satisfied with looking for “less expensive.”
What we’re also starting to see is interest in specialty products like self-storage, manufactured home parks, cold storage, data centers. People want that now. They’re specialty items for a reason. But the demand is far outpacing the supply in these areas. Many of the REIT’s are converting office assets to data centers or life science labs. Their buying at a 7 or 8% cap rate, investing some capex, and revaluing it to a 3 or 4% cap rate. If you're getting priced out of the Southern California multifamily market maybe it’s time to look at other areas or other assets. And as is the case for Southern California multifamily there are more buyers than assets for sale.
The savviest real estate investors right now are not afraid to be creative and envision a higher and better use for unloved assets.
Orange County
Orange County multifamily had 13 Closed Sales Last Week. This is down from 15 closed sales in the prior week and is on the lower end of the weekly closed sales range. Closed Sales - Average Days on Market was normal and indicating strong demand still at 30 days. 8 of the 13 closed sales were Transactions That Sold At or Above Asking Price. Another indicator of strong investor demand.
This week’s SALE OF THE WEEK For Orange County is an 8 unit building on Florida St. in Huntington Beach. The property was listed at $3,490,000 and sold for $3,555,000 in 26 days. The units were all 2 bedroom 1 bath. Most of the rents were at or near market rates. The interiors and exterior were both remodeled. The interior improvements were new kitchen cabinets and granite counters and Frigidaire appliances, including all in one washer and dryer inside each unit. Exterior improvements consisted of a custom BBQ island and the building was gated with key coded front and rear entry gates, gated parking with remote control entry and building security cameras. The property sold at 25.7 x gross and at a 2.43% cap rate. The price per sq. ft. was $955. In comparison, the Orange County average price per sq. ft. is $637.
Orange County multifamily inventory slipped downward again with just 4 New Listings Last Week. The Total Number of Active Listings now stands at 123 total listings. The overall number of listings has been trending downward for several months. Months of Inventory remained at 3 months. We’ll have a new monthly Absorption Rate next week which will give us an indication of how things have changed over the last 30 days.
Live MLS and Sale of the Week Link expires in 30 days after published View Live MLS Data View PDF Version SALE OF THE WEEK
Long Beach
Long Beach multifamily had 7 Closed Sales Last Week. This is one less than the prior week as we’re seeing a downward trend overall for weekly Long Beach closed sales. The Closed Sales - Average Days on Market was similar to most areas of Southern California at just 28 days. There were 4 of the 7 closed sales that were Transactions That Sold At or Above Asking Price. This continues the trend for Long Beach which has been averaging about half or more of the weekly transactions that sell at or above the original asking price.
The Long Beach SALE OF THE WEEK is a 16 unit building on Cherry Ave. This property hit the market at a 4.93% cap rate and was listed and sold at $2,550,000 in 22 days. Built in 1923 and consisting of all single or bachelor units of approx. 281 sq. ft. each. The property is located in the highly desirable Rose Park and Alamitos Beach area. The entire electrical system was completely replaced and the plumbing was updated to copper. The property sold at 12.85 x gross and just $159,000 per unit. The price per sq. ft. was $565. The average price per sq. ft. in Long Beach is $494.
Looking at the Long Beach listing inventory. Long Beach had a strong week of new inventory with 13 New Listings Last Week. This brings the Total Number of Active Listings up to 96 listings. This is the highest number of total listings for Long Beach in 6 weeks.
Live MLS and Sale of the Week Link expires in 30 days after published View Live MLS Data View PDF Version SALE OF THE WEEK
Los Angeles County
Los Angeles County multifamily was back to normal with 87 Closed Sales Last Week after dropping to just 65 closed sales in the prior week. The Closed Sales - Average Days on Market was normal at 41 days. Almost half or 40 of the 87 closed sales were Transactions That Sold At or Above Asking Price.
The LA County SALE OF THE WEEK was a 12 unit building on 61st St. in Los Angeles. The property was listed at $1,150,000 and sold for $1,280,000 in 2 days. That’s $106,000 per unit, 10.34 times gross and $142 per sq. ft. All extremely good numbers for LA County. Built in 1964. The units consisted of seven 1 bedroom 1 bath, three 2 bedroom 1 bath, one single and one 3 bedroom 2 bath. Most of the tenants are long term tenants and most of the rents were at or close to market rate.
Los Angles County multifamily had another strong week of new listings with 136 New Listings Last Week. This keeps the Total Number of Active Listings above 1,700 for another week. The Months of Inventory remained at 12 months.
Live MLS and Sale of the Week Link expires in 30 days after published View Live MLS Data View PDF Version Sale of the Week
San Diego County
After dropping to 16 closed sales in the prior week San Diego County multifamily rebounded with 22 Closed Sales Last Week. This is more in line with the average number of weekly closed sales. The Closed Sales - Average Days on Market was normal at 28 days. There were 8 of the 22 Transactions That Sold At or Above Asking Price and 7 of the closed sales were All Cash Transactions.
San Diego County had 15 New Listings Last Week. This is less than the usual amount of weekly new listings which typically averages around 20+ new listings per week. The Total Number of Active Listings dropped again to 162 total listings. After hitting the lowest number of active listings in the prior week, San Diego County’s listing inventory is now at the lowest number of active listings this year.
Live MLS and Sale of the Week Link expires in 30 days after published View Live MLS Data View PDF Version
Riverside County
Riverside County multifamily had 7 Closed Sales Last Week. That’s down from 9 in the prior week. The Closed Sales - Average Days on Market was 60 days. Riverside County seems to be trending to longer days on market than most areas of Southern California. There was just 1 Transaction That Sold At or Above Asking Price and just 1 All Cash Transaction Last Week.
There were 7 New Listings Last Week. This is about average for weekly listings in Riverside County. But Riverside County’s Total Number of Active Listings dropped to just 75 listings. This is the lowest the Total Number of Active Listings has been in 2 years. So, we’re seeing some tightening of the inventory which is typical for this time of the year.
Live MLS and Sale of the Week Link expires in 30 days after published View Live MLS Data View PDF Version
San Bernardino County
San Bernardino County had a good week of closed sales with 12 Closed Sales Last Week. This is about the average of weekly closed sales for San Bernardino County. The Closed Sales - Average Days on Market was 30 days. Also, about average for San Bernardino County. 5 of the 12 Closed Sales Last Week were Transactions That Sold At or Above Asking Price.
The listing inventory for San Bernardino County had 9 New Listings Last Week. This bumped the Total Number of Active Listings from 125 listings in the prior week to 127 last week. Months of Inventory remained at 7 months.
Live MLS and Sale of the Week Link expires in 30 days after published View Live MLS Data View PDF Version
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