Westside Income Q1 2010: Santa Monica's Allure Untarnished - Side-Lined Capital Seeks the Few Best-Priced, Best-Quality Assets

Multifamily properties in Santa Monica traded in the narrow band of 11.7 - 14.2 GRM during the 1st quarter of 2010. All of these properties were within 1 mile of the beach and offered the best combination of price, quality, and unit mix of those listed.

The short sales and foreclosures that have plagued the local residential market have not much impacted the Westside multifamily property sector. Most owners are well-capitalized and despite the fact that vacancies have crept up and rents have declined, few owners have been forced to liquidate their holdings.

There is great diversity of product on the market. We see the strongest interest in the few non-rent controlled buildings and B-or-better quality buildings in B+-or-better quality neighborhoods. We see the weakest interest in buildings that have below-market rent-controlled units and that are near Freeways or on major streets.

There is a flight to quality and the realization that we may not in our lifetimes see a 7% cap anywhere on the Westside.

1101 Bay Street in Santa Monica sold for an 11.7 GRM. This building has 16 units, 15,788 sq ft of living area, and sold for $3.2 million with gross income of $272,000. 8 x 1 br, 8 x 2 br.
1137 11th Street in Santa Monica sold for an 14.2 GRM. This building has 11 units, 13,913 sq ft of living area, and sold for $3.0 million with gross income of $212,000. 3 x 3 br, 6 x 2 br, 2 x 1 br.

908 4th Street in Santa Monica sold for an 13.1 GRM. This building has 18 units, 7,760 sq ft of living area, and sold for $2.98 million with gross income of $227,000. All units are singles. This is a non-rent-controlled building.
3728 Delmas Street in Palms-Mar Vista sold for an 11.4 GRM. This building has 8 units, 11,045 sq ft of living area, and sold for $2.1 million with gross income of $185,000. 2 x 3 br, 4 x 2 br, 2 x 1 br. This is a non-rent-controlled building, and we think this is the best deal of the quarter.
1257 9th Street in Palms-Mar Vista sold for a 14.4 GRM. This building has 5 units, 4,220 sq ft of living area, and sold for $1.3 million with gross income of $90,600. 1 x 2 br, 3 x 1 br, 1 x 0 br.

If you have any questions about income properties, please contact us by clicking on this link to send us an email or by calling us at (310) 845-6810.

You can also subscribe to our quarterly Los Angeles Investment Property Newsletter, by clicking on this link. To see a sample of the newsletter, click on this link.