Updated July 21, 2026
Entitlements are the government approvals — zoning conformance, conditional use permits, variances, subdivision maps — required before a property can be developed or redeveloped as proposed. For multifamily land, entitlement status is often the single biggest driver of value.
A fully entitled site has cleared its discretionary approvals (or qualifies for ministerial by-right processing) and can move straight to building permits. An unentitled site still needs its density, use, and design approved by the local planning department or a hearing body — a process that can take months to years in LA and carries real execution risk (community opposition, CEQA review, changed zoning).
In LA, entitlement risk is why two adjacent parcels zoned identically can trade at very different prices — one with plans approved and ready to pull permits, the other still needing to run the full discretionary gauntlet. Sellers of underutilized or redevelopment-candidate sites should know their true by-right and density-bonus capacity before pricing; buyers discount heavily for entitlement uncertainty.
The gap is real money, not theory. The Sterman archive has 10751 Rose Ave in Palms trading twice 75 days apart in 2022 — first as a land parcel for $10.8M, then as a 118-unit property for $31.7M. Nearly $21M of value moved between those two closings without the land itself going anywhere; what changed was the site's development-ready status.
From the Sterman LA Multifamily Glossary — defined the way a broker actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
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