Q2 2012 Los Angeles, California Apartment Property Sales Analysis

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Q2 2012 Los Angeles, California Apartment Property Sales Analysis

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.

Top Submarkets

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.