Los Angeles Multifamily MarketView Figures Q3 2018
The Los Angeles multifamily market has been extraordinarily dynamic over the past year, with net absorption and delivery totals reflecting sustained high levels of demand and completions. For the year ending in Q3 2018, completions totaled 13,026 units (up 61.6% from year ending Q3 2017) and absorption grew 46.1% to reach 14,182 units.
As the 12-month new demand total outpaced supply, the Q3 2018 vacancy rate tightened slightly year over year to 3.5%.
In Q3 2018, the average monthly effective rent of $2,201 was up by 3.8% from the prior year. The average rent has increased for 32 consecutive quarters.
Multifamily asset acquisitions reached $2.8 billion in Q3 2018 (up 13.1% year over year), the strongest quarter since Q4 2016. Cap rates stayed firm at 3.5% in Q3 and hovered around historical lows with stability projected through H2 2018, according to CBRE’s North America Cap Rate Survey.
While private buyers were the most active buyers (65% of total share), institutional (22%) and foreign investors (13%) captured a growing share of investment volume.