Going-in cap rate is the cap rate at purchase — acquisition price divided by in-place NOI. The benchmark against which hold-period performance and eventual exit cap rate are measured.
Distinct from stabilized cap rate (for value-add deals) or projected cap rates in later years, going-in captures the actual deal at close. When brokers quote "the cap rate," they usually mean going-in on stabilized properties.
For LA multifamily 2026: going-in caps run 3.5% (Westside premium stabilized) to 6.25% (Western Valley value-add). The going-in cap rate is what the buyer actually pays for the current income stream; the exit cap rate is the underwriting assumption about the future.
From the Sterman LA Multifamily Glossary — defined the way a broker with $1.41 billion across 254 closed transactions actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
Thinking about selling? Get a no-obligation evaluation from a broker with $1.41 billion across 254 closed LA multifamily transactions.
Request Free Evaluation →