How to Value an Apartment Building in Los Angeles (2025 Guide)

By The Group CRE | Updated: December 2025

Valuing an LA apartment building requires analyzing current Cap Rates (averaging 4.5%-5.5%), Net Operating Income (NOI), and specific neighborhood rent multipliers. Factors like Rent Stabilization Ordinance (RSO) status can impact value by up to 20%.

Los Angeles apartment building for sale in Silver Lake

Determining the Value of Multifamily Assets in LA

If you own an apartment building in Los Angeles, you know that standard residential comps don't apply. Commercial valuation is a mathematical formula driven by income, location, and potential.

The 3 Metrics That Matter

Cap Rate (Capitalization Rate): This is your Net Operating Income (NOI) divided by the Price. In Los Angeles, buyers are currently looking for Cap Rates between 4.5% and 5.5% for stabilized assets.
GRM (Gross Rent Multiplier): This is the Price divided by the Gross Scheduled Income. A typical GRM in high-demand areas like Silver Lake or West Hollywood hovers around 12x-15x.
Price Per Door: While less technical, this is a quick metric. Class B units in LA often trade for $300k-$450k per door depending on the neighborhood.

The "Value-Add" Factor The biggest driver of value in 2025 is "upside." If your current rents are $1,500 but market rent is $2,500, buyers will pay a premium for the opportunity to renovate and re-tenant the building, even if the current cash flow is low.

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Frequently Asked Questions

What is a good cap rate in Los Angeles?

As of 2025, stabilized Class B apartments in Los Angeles trade between a 4.75% and 5.50% cap rate. However, luxury buildings in Santa Monica may trade lower (3-4%), while value-add deals in East LA might trade higher.

How does rent control affect my building's value?

Los Angeles RSO (Rent Stabilization Ordinance) limits annual rent increases. Buildings with significant "loss-to-lease" (rents far below market) often sell at a lower immediate Cap Rate but a higher price-per-unit due to upside potential.