By Dana Bartholomew

Rents have slipped across greater Los Angeles with fewer apartment vacancies except the luxury market, where the vacancy has hit 13.1 percent. Rents across Los Angeles County dipped 0.3 percent in the third quarter to $2,232 from the prior period, while they rose 0.6 percent from $2,218 a year earlier, Bisnow reported, citing figures from NAI Capital.

At the same time, apartment vacancy fell to 4.7 percent, from 5 percent, and a smidgeon lower than last year.

Among the 65,809 luxury units built since 2020, 8,510 are empty, putting the vacancy at 13.1 percent. That means potential renters either can’t or won’t pay for fancier apartments.

A slowing construction pipeline for multifamily projects may increase demand — and raise rents — in the years ahead.

Since 2020, the amount of newly built apartments has been 12.4 percent below pre-pandemic levels, according to USC’s latest Casden Real Estate Economics Forecast, which predicted near-term rent growth of 1 percent next year and 2 percent in 2026.

In Los Angeles County, the average apartment rent is expected to rise to $2,334 a month by mid-2026, a 3 percent increase from $2,276 a month last summer, according to the forecast.

For investors, Newmark Vice Chairman Dean Zander said to focus on a lack of new supply and the county’s shortage of rental housing, and the implications for future rents.

“We’re well-positioned for meaningful rent growth over the next couple of years” because of the trickle of new supply in the pipeline, Zander told Bisnow.

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By Natalie Dolce

Today's multifamily owners are navigating unprecedented challenges, yet they remain agile, profitable, and prepared to respond to rapid market shifts. At the GlobeSt. Multifamily Fall conference on Tuesday, attendees gained insights into the daily successes and hurdles faced by leading owners, exploring the factors driving profits and sustainable growth across various property classes.

Moderator Kamran Paydar, first vice president at CBRE Inc., led a panel featuring industry experts: Eric Ostgarden, vice president of property operations at AvalonBay Communities; Hailey Ghalib, senior managing director and head of housing investment and development at Affinius Capital; Damian Gancman, chief operating officer and chief financial officer at Cityview; Dean Zander, vice chairman at Newmark; and Noah Hochman, co-chief investment officer & head of capital markets at TruAmerica Multifamily.

Paydar opened the discussion by addressing the anticipated series of rate cuts at the beginning of the year, asking panelists for their perspectives on market activity over the past year.

Hochman noted a recent uptick in activity but acknowledged ongoing challenges. "It has been much slower than anticipated, with interest rates and borrowing costs being the main culprits," he said.

Ghalib shared a similar sentiment, expressing that while their company has remained busy this year, the expected recovery did not materialize. "I'm a glass-half-full person, though," she stated. "The supply and demand gap has narrowed significantly. While there is still uncertainty regarding the pace and depth of rate cuts, I believe the worst may be behind us."

Ostgarden explained that his company closed five deals last month, emphasizing AvalonBay's focus on strategic growth markets. "There's a lot of activity happening—though it's a bit dry in California, things are still moving."

In terms of shifting market expectations, Zander said "It has been a robust year for us, but we're now at a point in the cycle where it feels like greed is replacing fear. The capital sitting on the sidelines is going to be deployed; nobody on this panel wants to miss out on opportunities."

The conversation then turned to deal specifics. Hochman discussed recent transactions, their approaches, and valuation metrics. "Our perspective this year was that the worst was behind us. While we didn't know exactly when interest rates would decrease, we had the conviction to capitalize on the reduced buyer pool."

He continued, "Earlier this year, we focused on acquiring newer vintage deals for value-added returns. We targeted properties built in 2000 or later in markets like Salt Lake City and Las Vegas. The sellers had held these assets for a long time, and we aimed for mid-teens returns on a five-year hold, leveraging agency financing."

Hochman continued, "Looking ahead, we see opportunities in older properties from the '80s and '90s, where the buyer pool is smaller. We pivoted in the second half of this year back to our core business, focusing on states with job and population growth—primarily in the Sunbelt markets. We've steered clear of heavily regulated areas. While there is some oversupply in high-growth markets, we've noticed fundamental shifts in the ones we're targeting, which indicate a potential for opportunity."

Dean Zander
Vice Chairman
t 310-407-6522
m 818-601-2055
[email protected]

Newmark
1875 Century Park E
Los Angeles, CA 90067

Newmark is pleased to announce that Dean Zander has joined the firm as Vice Chairman, based in the Century City office in West Los Angeles.

Zander brings over three decades of experience in the multifamily sector throughout Southern California, closing transactions valued at more than $11.9 billion across 58,000 units over the course of his career.

"Newmark's multifamily business is experiencing significant growth, and bringing on Dean, one of the best in the industry, enhances our ability to meet evolving market demands and deliver exceptional results,” said Chad Lavender, President of Capital Markets for North America at Newmark. “His decision to join Newmark underscores our upward trajectory in capital markets, and we are confident his expertise will be instrumental in driving our continued growth and success."

“Dean’s impressive track record and deep industry knowledge make him a valuable addition to our team,” said Nick DiPaolo, Executive Vice President, Regional Managing Director, Southwest Market Leader at Newmark. “His commitment to integrity and exceptional client service aligns perfectly with Newmark's culture and values."

Zander will work with Newmark’s top West Coast professionals, including Mitch Clarfield, Kevin Shannon, Chris Benton and Anthony Muhlstein. Zander represents institutional and large private capital clients, including Nuveen, Blackstone, Western National Group, Sares Regis, Prudential Real Estate, Equity Residential, AvalonBay Communities, Essex Property Trust Inc., Jackson Square Properties, The Bascom Group and Davlyn Investments, among others.

Prior to joining Newmark, Zander held senior brokerage roles at CBRE, Berkadia and Sperry Van Ness. For nearly 25 years, he has consistently ranked among the top 5% of the most successful investment sales advisors at the brokerage firms with which he has been associated.

Zander added, "I am thrilled to join Newmark, a world-class platform that embodies excellence. Leveraging the firm’s vast resources and capabilities, I look forward to further elevating my business and continuing to deliver the most favorable outcomes for my clients.”

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By: Bianca Barragan

As Los Angeles plans to update the housing guidelines that dictate where new homes can be built, affordability advocates have noticed something they find troubling: The plan leaves out nearly three-quarters of the residential portion of the city. 

That is because the city’s plan leaves out land zoned for single-family homes, which make up 72% of LA’s residential area.

The city seems to be on track to keep it that way, but a coalition of about 40 organizations that work on housing issues are pushing to change things. They want the city to open up more single-family areas for multifamily development by changing the zoning during the state-mandated housing element update process. 

As Los Angeles plans to update the housing guidelines that dictate where new homes can be built, affordability advocates have noticed something they find troubling: The plan leaves out nearly three-quarters of the residential portion of the city. 

Single-family zones are not eligible for affordable housing incentives the city is planning, with some exceptions for projects proposed by and on land owned by religious organizations. They are also left out of a transit-focused incentive package for affordable housing, the planning department said in an October note. 

Adding more incentives to commercial areas or parts of the city where apartment projects are already allowed won’t help the city meet the ambitious housing targets it needs to, the letter said. According to the California Regional Housing Needs Assessment, Los Angeles needs to add more than 450,000 housing units by 2029. 

Those in the development community who spoke with Bisnow agreed that making more land open to multifamily development in the city would remove one hurdle to build more housing and noted that it was likely the only way to hit the mandated housing goals the city will be on the hook for. 

But there are a number of other hurdles between new housing projects and the finish line, including high interest rates and construction costs, relatively flat rents and even Measure ULA, said CBRE Executive Vice President Dean Zander, who specializes in multifamily investment sales.

Others in the development community noted that, in their experience, housing is already challenging to build where it should theoretically be allowed.  

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CBRE has arranged the sale of a 2.9-acre development site encompassing several parcels of land in Arcadia. Dean Zander and Stewart Weston of CBRE and John Montakab of Walker & Dunlop facilitated the sale on behalf of the buyer, a joint venture between Trammell Crow Residential (TCR) and Arcadia-based Positive Investments. Deal terms were not disclosed.

The land is adjacent to the Arcadia Gold Line light-rail station and situated between Santa Anita Avenue, Santa Clara Street and Wheeler Avenue. Existing improvements include parking lots, an eight-story office building and a single-story bank building. TCR plans a 319-unit multifamily development under its Alexan brand on the 2.2 acres of land adjacent to the existing structures.

“The strong demand for housing and steady rent growth in the market make this land purchase a highly valuable investment for the new owners,” said Zander. “With the approved construction plans for multifamily housing, Trammell Crow Residential will be able to take advantage of excellent market fundamentals.”

BY Bianca Barragan

Apartment rents are expected to grow between 2% and 4% in the next two years in all five Southern California housing markets, according to the new University of Southern California Casden Real Estate Economic Forecast.

In Los Angeles County alone, rents are projected to grow 2% over the next two years.

“For now, rent growth will be somewhat moderate,” Moussa Diop, forecast author and USC Sol Price School of Public Policy associate professor of real estate, said in a release about the findings.

It is a statistic that might not be welcome news for apartment owners.

“I don't think anyone on the ownership side — direct owners, operators and developers — like to hear 2%,” Northmarq Regional Managing Director Vince Norris said. “Currently, inflation exceeds that number, so it's tough to make money with a 2% rent growth target.”

Northmarq’s third-quarter report for this year also anticipates 2% rent growth in LA County in the coming year.

Los Angeles rents were relatively flat month-over-month at the end of October and down 2.8% year-over-year, according to Apartment List data. Rent growth in Los Angeles in the 12 months trailing October was below both the national average of negative 1.2% and the California average of negative 2%, Apartment List found.

Median rent for a one-bedroom unit in LA stood at $1,633 per month and $2,157 for a two-bedroom as of the end of October, according to Apartment List.

Owners of the more than 600,000 rent-stabilized apartments in the city of Los Angeles, the majority of rental units in LA, can raise rents for the first time in three years after a pandemic-related pause on increases. The Los Angeles City Council voted this week to allow rent increases of 4%, or 6% if landlords pay for tenants' utilities and gas, beginning Feb. 1.

“A 4% increase doesn't even begin to make up for the fact that there have been no increases for 36 months and collection issues during Covid,” CBRE Executive Vice President Dean Zander said.

But some owners said that, while rent growth is an important metric, it isn't the only factor in the value of a property.

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By: TRD Staff

By Mark Nieto

A private partnership formed by Harrison Yale Hurst and Richard Rosin of H&R Investments has acquired LC by CLG, an 84-unit luxury multifamily community in the Larchmont Village neighborhood of Los Angeles. CBRE’s Dean Zander and Stewart Weston represented the seller, California Landmark Group in the $46.5 million transaction.
“LC by CLG is a true trophy asset and poised to be a market leader in the submarket for years to come,” said Zander. “The investor plans to perform some cosmetic upgrades to the original interiors and common areas to ensure the property remains among the area’s leading residential communities.”
Adjacent to historic Paramount Studios, the boutique community offers residences with a condo-quality feel, featuring expansive floor plans, large windows, stainless-steel appliances, air-conditioning and exposed ceilings. The complex also includes a rooftop deck with a pool, BBQ’s, firepits, seating areas and views of the Hollywood hills. 

CBRE negotiated the sale of luxury multifamily community, RIZE Irvine to Sierra Village Associates, an LLC based in Southern California.

CBRE’s Stewart Weston and Dean Zander represented the seller, a private real estate company with an extensive portfolio nationwide and affiliate of Fairfield Residential. Financing was arranged by CBRE’s Debt & Structured Finance team including Troy Tegeler, Ryan Greer, Trevor Breaux, and CJ Connolly.

Built in 2018 and located on Von Karman Avenue near Alton Parkway, RIZE Irvine represents a substantially sized luxury asset in one of the most sought-after markets in Southern California. Less than 10 miles from the Pacific Ocean, the property is prominently positioned in the Irvine Business District (IBC) and offers residents a short commute time or even the ability to walk to work. The surrounding neighborhood features high-tech companies, luxury hotels, fine dining restaurants, and 16 million square feet of Class A office space.

“Residents of RIZE Irvine are surrounded by more than 100,000 jobs within the IBC, and over one-third of the Fortune 500 companies have a corporate presence,” said Stewart Weston, an Executive Vice President with CBRE. “This leads to a wealth of high-paying employment options.”

Offering a “best in class” amenities package, RIZE Irvine is equipped with a two-story fitness club, multimedia iCafe and community workspace, central plaza with pool and cabanas, two poolside lounges, private deck on the fifth floor, and a spacious dog park. Lavish apartment features include nine-foot ceilings, oversized walk-in closets with custom shelving, USB charging outlets, full-size Whirlpool washer and dryer, and Whirlpool stainless steel appliances including five-burner gas stoves.

“RIZE Irvine is a luxury community thoughtfully curated with ultra-modern interiors and amenities catering to affluent residents,” said Dean Zander, an Executive Vice President with CBRE. “The average household income for residents of RIZE is nearly 25% higher than the city of Irvine.”

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By Chuck Slothower

In California and Oregon, rent control laws prevent landlords from raising the rent on existing tenants by more than about 10% a year.

But when tenants leave, however, it's a different story. Landlords routinely raise rents by much more, real estate experts said.

The limits on occupied units mean landlords tend to raise rents as aggressively as possible in vacant apartments while securing a new renter.

In an investor call earlier this year, Adam Wyll, president and chief operating officer of American Assets Trust, a major West Coast real estate investment trust based in San Diego, revealed that rent growth upon lease turnover was more than double that of occupied apartments.

"Regarding our multifamily portfolio in San Diego, we are seeing vacant units lease at an average of over 20% over prior rents with little to no concessions offered," Wyll said. "Note that renewal rates are capped just below 10% based on California laws. So we are maximizing the rental rates on vacant units to the full extent of our capabilities, all the while managing expenses."

Neither California nor Oregon's rent control laws place any limit on rent hikes once an apartment turns over. That often means new tenants can end up paying much more than the previous renter.

"Generally, if the unit is vacant, it's brought to market [rent levels] and the increase is much healthier than 10%," said Dean Zander, executive vice president for CBRE in Los Angeles.

Local regulations vary, as California allows cities to enact stricter rent control regimes, which has been done in Los Angeles, Berkeley and other municipalities. Rent caps are also tied to local consumer price increases, and in Oregon, the allowable rent hike cap is set statewide.

Nationally, rents grew by 16% during the first half of 2022, according to Freddie Mac. Rent growth is expected to remain robust, with high interest rates keeping would-be home buyers in apartments, all while a nationwide lack of multifamily supply is struggling to meet demand... READ MORE