863 S Bedford St, Los Angeles, CA 90035

Property Overview

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863 S Bedford is an eight-unit multifamily investment offered at $2,500,000 ($312,500/unit | $339.12/SF) in Pico-Robertson, one of Los Angeles' most supply-constrained rental submarkets where established, cash-flowing assets with clear rent normalization pathways remain increasingly difficult to source. Built in 1959 on a 6,534 SF lot, the property features six one-bedroom/one-bath and two two-bedroom/two-bath residences, each averaging 922 SF across 7,372 SF of building area.

All eight units are currently occupied and generating $19,202 in monthly rent from close of escrow at a 5.49% in-place cap rate. Current rents average $2,400 per occupied unit against market rents of $2,600–$3,150 — a 14.79% average discount representing approximately $29,000 in annual NOI growth achievable largely through natural tenant turnover, with no capital improvement program required. One occupied unit sits 37.2% below market rent — the single largest upside opportunity in the portfolio — while five additional units carry 5–10% gaps waiting to normalize at each lease renewal.

Subject to the Los Angeles Rent Stabilization Ordinance, the incoming owner captures rent increases systematically at each vacancy — building toward stabilization one turnover at a time. At full market rents, NOI grows from $137,183 to $166,331, delivering a 6.65% pro forma cap rate, a 9.51 GRM, and meaningful cash-on-cash expansion on conventional financing. The property's separately metered utilities shift costs to residents, keeping pro forma expenses at just 33.42% of EGI — well below typical multifamily benchmarks. With eight on-site parking spaces in a dense urban corridor and a disciplined operational profile, the asset is well-positioned for long-term occupancy stability and rent growth.

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Key Property Details

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• Address: 863 S Bedford St, Los Angeles, CA 90035
• Units: 8
• Unit Mix: (6) 1-Bed / 1-Bath | (2) 2-Bed / 2-Bath
• Parking: 8 Spaces
• Rent Control: Subject to LA RSO
• Occupancy: 100% (8/8 Units)

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Investment Highlights

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• Strong Returns That Compound as Market Rents Are Achieved — Cap Rate Expansion + 355 Basis Points: At acquisition: 5.49% cap rate and 1.99% cash-on-cash. At stabilization: 6.65% cap rate and 5.54% cash-on-cash — a 355-basis-point CoC improvement on a 32.8% down payment. The expansion flows entirely from rent normalization as units turn, with zero capex or capital improvement required.
• NOI Expansion Through Rent Realization — 21.3% Growth, Zero Capex: Current NOI of $137,183 grows to $166,331 at market rents — a 21.3% increase with no capital needs or repair exposures embedded in the pro forma. This expansion is unlocked through one mechanism: vacancy and the Los Angeles RSO's systematic rent-capture framework at each turnover.
• 100% Occupied — Immediate Cash Flow From Day One: All eight units are currently occupied, generating immediate $19,202/month income from close of escrow. No lease-up risk; day-one cash flow covers debt service and operations while the property executes its patient turnover-driven value-add strategy at its own pace.
• Constrained Supply Environment Supports Durable Rent Growth: High barriers to new multifamily construction, zoning constraints, and limited development opportunities ensure existing rental stock remains well-occupied with minimal concessions. This supply-constrained market supports consistent rent growth and long-term appreciation for well-located assets like 863 S Bedford.

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Neighborhood and Accessibility

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Pico-Robertson has emerged as an increasingly desirable destination for quality renters seeking a livable community with strong local character and walkability. The immediate area features established tree-lined streets, well-maintained single-family and multifamily properties, and a vibrant local business corridor with restaurants, cafes, retail, and services that define everyday neighborhood life. This is the kind of block where long-term residents choose to stay — where community stability, local investment, and neighborhood pride create the foundation for sustained tenant demand and low turnover.

863 S Bedford provides residents convenient freeway access to Downtown Los Angeles, mid-city employment centers, and major job clusters throughout the greater LA area — all within 15–20 minutes of the property. The neighborhood's appeal to quality renters stems from its combination of affordability, walkability, and neighborhood livability that is increasingly rare in Los Angeles. Renters priced out of adjacent, costlier neighborhoods continue to recognize Pico-Robertson as a high-quality, centrally located alternative.

With high barriers to new multifamily construction and limited development opportunities, the existing rental stock remains well-maintained and well-occupied. This creates a durable demand environment where established properties like 863 S Bedford benefit from consistent tenant interest, minimal concessions, and steady rent growth. For investors, a livable neighborhood with constrained supply and strong fundamentals translates to a reliable income asset with durable tenant demand and long-term appreciation potential.

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For more information and to schedule a viewing, please contact:

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Taylor Avakian

Founder, The Group CRE

First Vice President, Lyon Stahl