Multifamily Investment Growing in L.A., But So Are Cap Rates and Vacancy
All three metrics have grown in the region since 2023, according to Kidder Mathews
By Nick Trombola January 16, 2026 6:10 pm
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The amount of multifamily units sold in Los Angeles County crept upward both years after 2023, indicating improved investor demand for housing despite growing risk, vacancy and eye-popping prices.
Nearly 30,000 units traded hands across the county in 2025, a metric that has steadily increased since the post-pandemic low of 2023, according to a fourth-quarter market report by Kidder Mathews. Fewer than 20,000 units were sold in 2023, below even the shutdown doldrums of 2020.
Measure ULA, the city’s property transfer tax that imposes an additional 4 or 5.5 percent levy on deals that cross certain price thresholds, was notably enacted in April 2023, much to the chagrin of most investors. A study by UCLA last spring claimed that multifamily sales volume had contracted by as much as 50 percent. Kidder Mathews’ report further implies a massive drop in unit sales between 2022 and 2023.
L.A.’s growing sales volume implies that investors are getting used to the fact that ULA is here to stay. Indeed, the tax earlier this month surpassed $1 billion in total revenue raised since enactment, and the annual haul has grown every fiscal year.
Average cap rates are currently at 5.6 percent after having risen every year since 2022, per the brokerage’s report. Average unit price dipped 3 percent year-over-year to about $278,000. Average rent prices wound up flat by the end of 2025 compared to the previous year, and vacancy hit 5.6 percent while trending upward every year since 2021.
Still, at least four multifamily deals closed at nine figures in the final quarter of the year. Madison International Realty’s $161.2 million purchase in December of the El Centro Apartments & Bungalows in Hollywood was the priciest of the past three months. Carmel Partners’ $141 million deal for Stella in Marina Del Rey was the second priciest of the quarter; and Kennedy Wilson’s $135 million deal for The Chadwick in Koreatown, and Eagle Partners’ $107 million purchase of Hills at Hacienda Heights in Hacienda Heights followed at third- and fourth-highest price points.
Nick Trombola can be reached at ntrombola@commercialobserver.com.
