Updated September 28, 2026
There is a moment, three to six months before a landlord calls me, when selling becomes the obvious move. Most landlords miss that moment. The ones who catch it walk away with materially more money. The ones who miss it spend the next eighteen months rationalizing why the offer they turned down was the wrong one. In 2026, that moment is right now, and the reason is three forces converging that most sellers haven't connected yet.
LA multifamily has been through three distinct markets in five years. 2021 was euphoria — Koreatown pricing ran to levels nobody will see again this decade. 2023 was a frozen lake — transaction volume hit a fifteen-year low of $4.6 billion as interest rates climbed and buyers and sellers stopped talking. 2024 began the thaw. 2025 stabilized. 2026 is the year the market moves again, and it's moving on conditions nobody talked about in 2022. Three forces are converging.
One: the RSO rewrite. On December 12, 2025, the LA City Council approved a fundamental rewrite of the Rent Stabilization Ordinance. Effective July 1, 2026, the allowable rent increase formula drops from 100% of CPI with an 8% ceiling to 90% of CPI with a 4% ceiling. The floor drops from 3% to 1%. Utility reimbursement bumps and dependent occupant increases are eliminated entirely. If you own a pre-1978 LA City building, the cash flow model you have been running is obsolete. The math changed. Your building's DCF valuation didn't get the memo.
Two: the post-1995 cliff is widening. Proposition 33 failed on the November 2024 ballot, 62% to 38%. Costa-Hawkins survives. That is the good news. The less-good news: the valuation gap between your 1965 duplex and your neighbor's 2001 fourplex has never been larger, and every quarter it gets bigger. Institutional buyers are stacking bids on post-1995 product. Pre-1978 buildings clear at different prices than they did eighteen months ago, and not because of anything you did wrong.
Three: institutional capital is back. LA multifamily transaction volume hit $6.5 to $7.9 billion in 2025 across 557 deals. Private equity, family offices, and 1031 exchangers — the buyers who went dark in 2023 — are actively bidding again. Core-plus PE in particular is aggressive on newer Class-A product. This is the buyer pool that pays the top of the market. When they show up, prices move. If you own multifamily in Los Angeles, those three facts describe your universe today. The question is what you do with them.
The sellers who time this correctly share a pattern. They recognize one or more of these signals in their own building.
Your rent roll has room you can't capture. Pre-1978 RSO building. Rents 25%+ below market. Long-tenured tenants. Under the pre-July 2026 formula, you could have pushed closer to market over time. Under the new formula, you can't. The building's intrinsic value just got capped. Buyers know this. If you sell now, the purchase is priced on the old trajectory; if you wait a year, it is priced on the new one.
You have owned it long enough that Prop 13 is your hidden wealth. Most LA landlords who bought pre-2010 don't realize that their Prop 13-protected tax basis becomes the buyer's problem at sale. The buyer reassesses to current market value, their property tax jumps, their NOI drops, and that discount shows up in the offer. On a building with two decades of Prop 13 protection, the delta is material enough to change which offer is the best offer. That is not a reason not to sell. It is a reason to price realistically.
Your mortgage is coming due in 2027 or 2028. Refinancing into the current rate environment on a building with capped rent growth is often a worse outcome than selling. Run both numbers. If the refinance underwriter comes back with a DSCR that requires you to bring cash to the table, the market has already told you what to do.
You are closer to your next life than your last one. The 1031 sellers I work with most often are not selling LA multifamily because the market is perfect. They are selling because LA multifamily has become an active management job and they want a DST, a net lease, or an out-of-state portfolio that wires them checks instead of sending them notices from LAHD. That is a legitimate reason. It does not require the market to cooperate.
Price per unit at the metro level sits at $278,384 as of January 2026, down 3% year over year per Kidder Mathews — but that number reflects a heavier Class C mix than the 2022 peak. A well-maintained Koreatown 20-unit building is not trading at $278,000 per unit. It is trading materially higher. Your building's actual value is a function of its age (pre-1978 vs. post-1995), its income (in-place vs. market), its condition (deferred maintenance is a direct deduction from offer price), and its submarket. The broker's job is to tell you which of those levers is real and which is a story your last broker told you. A good broker opinion of value shows comparables, not adjectives. The Sterman Transaction Index lays out the median price per unit across 235 closed LA deals by submarket, so you can see where the real range sits before anyone quotes you a number. For a specific valuation on your building, request a free evaluation.
Two buildings built three years apart, a few miles apart, can sell under rent laws whose growth ceilings differ more than fourfold. And a sale price $110,000 lower can net you more money than the higher one. Neither shows up on a listing sheet. Both show up in the buyer's model.
Buyers price the rulebook before they price the building. In Los Angeles there are at least three, and the address decides which one you have, not the neighborhood name.
| Rent law | Which buildings | Rent increase |
|---|---|---|
| LA City RSO | Inside the City of Los Angeles, two or more units, built before October 1978 | 90% of CPI with a 1% floor and a 4% ceiling, from July 1, 2026 |
| State law, AB 1482 | Inside the City, built after October 1978 and more than 15 years old; more than 15 years old in cities without their own rent control, such as Burbank | 8.7% LA-area cap from August 1, 2026 (5% plus 3.7% CPI, never more than 10%) |
| LA County RSTPO | Unincorporated county territory, such as East Los Angeles, Florence-Graham or Marina del Rey | 60% of CPI with a 3% ceiling, which works out to 1.919% through June 30, 2027 for most units |
That is the spread: a 1980 building in the City can raise rents 8.7% this year, while a 1977 building across the county line can raise them 1.919%. A buyer underwrites that difference into every future year of income, and it lands in the offer. If you are not certain which one covers you, the LA County RSTPO vs. LA City RSO guide walks through it address by address, and the three rulebooks of Hollywood, West Hollywood and North Hollywood shows how sharply it changes pricing inside a few miles.
If your building is inside the City of Los Angeles and sells for more than $5,400,000, Measure ULA taxes the entire price at 4%, not just the part above the line. At $10,900,000 and up, it is 5.5%. Those are the thresholds for sales closing after June 30, 2026, and they reset every July.
Run the math on a building near the line. A $5,500,000 sale pays $220,000 in ULA and nets $5,280,000 before other costs. A $5,390,000 sale pays none and nets $5,390,000. The lower price puts $110,000 more in your pocket. Brokers who price off comps alone miss this, and sellers find it on the closing statement. Buildings outside the City (Burbank, Glendale, Santa Monica, unincorporated county) do not pay ULA at all. See pricing a building near a Measure ULA threshold, and Measure ULA and 1031 strategy if you are exchanging.
After 14 years at Marcus & Millichap, I see these four mistakes again and again, often enough to embarrass the industry.
One: waiting for the "right" market. The sellers who waited for 2022 to come back are now waiting for 2026 to look like 2022. It won't. The market you sell into is the market you have.
Two: pricing on the rent roll you wish you had. You list at market rents. The buyer underwrites at in-place rents plus a realistic capture assumption. The deal falls apart at price discovery. The fix is to list at a number the buyer can finance on the income the building actually produces today, not the income it would produce if the last three tenants moved out.
Three: showing the building with deferred maintenance still visible. A $50,000 repair the seller skipped often becomes a $200,000 price concession at close. The math is rarely kind on this.
Four: hiring the broker who tells them what they want to hear. The broker who gives you the highest valuation is not working in your interest. The broker who gives you the valuation that matches what the market will actually pay is. Ask for comparables. Ask for prices on closed deals, not listed deals. If the broker can't produce them, interview someone who can.
Every broker has a story about the building that sold for a record. These three are more useful, because two of them are the same building selling twice, and one of them went down.
1230 N Berendo St, 48 units. Closed at $4,060,000 in June 2014, then again at $6,335,000 in June 2016. Same building, same units, same street, and $2,275,000 more twenty-four months later. Nobody added a floor. The market moved. That is the clearest evidence I have that timing moves a price more than any renovation. The full story.
3701 Westwood Blvd, 7 units in Palms. Closed at $2,800,000 on March 25, 2020, ten days after California's first stay-at-home order. Sold again on October 16, 2020, for $2,700,000. Nothing about the building changed. What changed was whether a buyer could count on rent being collected. Why a building goes down.
18317-18331 Kittridge St, 72 units in Reseda. I closed it at $12,800,000 in June 2015 and closed it again at $17,000,000 in February 2021. That is $177,777 a unit to $236,111 a unit, about 5.1% a year on price alone. Holding worked. It worked at a measured pace, not a miraculous one, and that is the honest version of the hold-or-sell question. The full story.
From listing agreement signed to keys turned over, expect 90 to 150 days on a standard transaction. The first 30 days are preparation — rent roll, estoppels, operating statements, photography, marketing package. The next 30 to 60 days are marketing and offers. The final 30 to 60 days are escrow, inspections, loan contingency, and close. Inside that window, the work that determines whether you close at your number or at a reduced number is the work done in weeks 1 through 3. Before the first buyer sees the building. If that prep work is weak, every buyer's inspection turns up something the seller didn't know was there, and every one of those findings is a price reduction. The control is in the preparation. If your building is rent-controlled, how to sell a rent-controlled apartment building in LA covers the documents buyers ask for first. If speed matters more than price, selling for cash lays out what a cash buyer costs you.
When you interview brokers, ask these.
Most sellers don't call me when they are ready. They call me three months after they should have. The reason is always the same. They heard something — a rumor about interest rates, a neighbor's sale that went sideways, a headline about Costa-Hawkins — and they waited to see what happened. The thing that happened was that the market kept moving, and the window that was open in February was smaller in May. If you own multifamily in Los Angeles and you have been thinking about selling, the signals in your own building tell you more than any market report will. The RSO rewrite changed the math on pre-1978 buildings. The post-1995 premium is still expanding. Institutional capital is back. The sellers who move on those conditions will do better than the sellers who wait for a cleaner story.
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How long does it take to sell an apartment building in Los Angeles?
Ninety to one hundred fifty days on a standard transaction, from listing agreement to close. The preparation work in weeks one through three determines pricing outcomes more than any later stage.
Does the new LA RSO formula affect my sale price?
If you own a pre-1978 LA City building, yes, materially. The July 1, 2026 formula change caps future rent growth at 4% (down from 8%), which reduces the building's discounted cash flow value at sale. Buyers are already pricing in the change. For the full mechanics of how a rent-controlled rent roll is underwritten and what it does to your number, see how rent control affects your apartment building's sale price in LA.
Should I sell or refinance in the current market?
Whether to sell or refinance turns on your own building's numbers, so run both before you decide. If refinancing requires you to contribute cash to hit DSCR, the market is signaling that the equity is trapped, and selling is the cleaner path. If refinancing pencils on in-place income, holding may be correct. The answer is specific to your rent roll, mortgage terms, and ownership timeline.
What is the biggest mistake LA multifamily sellers make?
The biggest mistake is waiting for a better market. The sellers who waited for 2022 to come back are now waiting for 2026 to look like 2022. It won't — the market you sell into is the market you have.
Should I sell my apartment building in Los Angeles now, or wait?
Whether to sell now or wait is specific to your rent roll, your mortgage, and your timeline — but the macro picture in 2026 is clear. The July 2026 RSO rewrite caps rent growth on pre-1978 LA City buildings at 4%, and buyers are repricing that cohort downward now, not later. If you are waiting for 2022 pricing to return, it is not coming. Run your actual numbers before you decide, and decide on the market you have rather than the one you remember.
How do I sell an apartment complex in Los Angeles?
Selling an apartment complex in Los Angeles follows the same process as selling any multifamily building, because "apartment complex," "apartment building" and "multifamily property" describe the same asset and owners use all three. The process does not change with the word: price on legal in-place income, get the rent roll and RSO registration clean before you list, and expect ninety to one hundred fifty days from listing agreement to close. Size changes the buyer pool, not the method — a 4-unit complex draws private local buyers, a 40-unit complex draws institutional capital, and both are underwritten on the income the building lawfully collects.
How do I sell a rent-stabilized (RSO) apartment building in Los Angeles?
Selling a rent-stabilized building in Los Angeles follows the same disciplined process as any sale, with one difference that drives everything: your legal in-place rents and the gap to market are the value. Buyers underwrite the income they can lawfully collect, so a clean rent roll, complete RSO registration, and accurate records matter more than cosmetics. Price it on the regulatory reality and you sell it once. Price it on a pro forma the buyer cannot collect and you chase the market down.
Do I pay Measure ULA when I sell my apartment building in Los Angeles?
Only if the building is inside the City of Los Angeles and the price is above the threshold. For sales closing after June 30, 2026, ULA is 4% of the entire price above $5,400,000 and 5.5% at $10,900,000 and up. Buildings in Burbank, Glendale, Santa Monica or unincorporated LA County do not pay it. Because it taxes the whole price, a sale just under $5,400,000 can net more than one just over it.
Which rent control law applies to my LA apartment building?
The address and the year it was built decide it. Inside the City of Los Angeles, two or more units built before October 1978 fall under the RSO; buildings built after that and more than 15 years old fall under state law, AB 1482, capped at 8.7% from August 1, 2026. Unincorporated county areas such as East Los Angeles fall under the county's RSTPO, capped at 3%. See LA County RSTPO vs. LA City RSO.
Michael Sterman is Senior Managing Director Investments at Marcus & Millichap, specializing in Los Angeles multifamily transactions.
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