Metro Volume and Pricing
Second quarter sales were identical in number to first quarter at 63 single property apartment transactions, but notably different in volume: the first quarter transaction total was $560.9 million, while the second quarter was $393.8 million. The second quarter mean price per unit was $160,000, down from $199,000 per unit in the first quarter, according to Reis Transaction Analytics.* This is not the strongest quarterly total this market has recorded, but it is substantial nonetheless. In the quarter’s largest sale, 392 units in the Victoria Heights property sold for $55.8 million, or $142,219 per unit. The buyer was La Colima 2010 LLC. Also in the second quarter, 249 units in the Torrey Pines apartments in West Covina sold for $43.7 million, or $175,502 per unit.
The Sherman Oaks submarket lead in dollar value sold over the past four quarters at $233 million, with 1,131 units sold. Wilshire/ Westlake led in units sold at 1,828. Once again, Pasadena leads in mean price for the period at $412,436 per unit, followed by Beverly Hills at $394,171 per unit.
Cap Rate Comparisons and Forecasts
The mean cap rate in Los Angeles finished second quarter at 6.1%, below the 6.6% rate recorded for the West region and the Nation. . Low cap rates are common in this active market. The rolling 12 month cap rate is just 6.0%, up 10 basis points from the quarter before. The rolling 12 month mean is forecast to end 2012 at 5.8% before gradually rising to 6.2% in 2016.