Los Angeles’ multifamily market is already experiencing uncertainty from rising rents and dropping vacancy, but high interest rates and the city’s looming tax on real estate transactions are adding to it. Bisnow spoke with New Standard Equities Founder & CEO Edward Ring on how this could impact L.A. multifamily investment in 2023.
During a recent attempt to acquire a property in North Hollywood, Ring saw firsthand some sellers attempt to exit the market before Measure ULA goes into effect and how this compares against an uncertain market and a buyer pool that expects to get an urgency discount.
“Everyone swarmed on this one property thinking it was going to be a deal, but instead, we came up pretty short in terms of where we thought value would be,” Ring commented. “Ultimately, the seller found out where the market believes the values to be and has elected not to sell,” he added.
The rising cost of borrowing is also putting pressure on the market but from a historical perspective, interest rates are “not too terrible,” adds Ring.
Read the full Bisnow article here.