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Los AngelesApartment investors may be moving on to greener pastures, if the investment activity last year is any indication. Maryland topped California as the state with the most apartment investment activity, moving the Golden State into the number two position, according to research from Yardi’s Commercial Café. While transaction volume was slower in 2017, it was a surprising move considering the demand that California has seen from apartment investors as well as the supply shortage of apartment product in California.

“California has significant legislation enacted in 2017, via SB35, signed by Governor Jerry Brown that requires most local governments to issue housing developers streamlined approvals in 90-180 days for projects that comply with a number of qualifying criteria,” Doug Ressler, a senior researcher at Yardi’s Commercial Café, tells GlobeSt.com about what is driving the decrease in investment activity here. SB 35 will allow owners to divest their portfolios of older properties and will be advantageous in producing multifamily housing in higher-cost areas with higher-wage workers in California’s coastal regions such as the Bay Area, Los Angeles/Orange County and San Diego.”

Blackstone remained the most active investor in California. During 2017, it closed 7 deals, buying over $2 billion worth of multifamily assets, largely through its subsidiary, LivCor. Essex Property Trust, Berkshire Property Advisors and The Carlyle Group also topped the list for most activity throughout the year. The Bay area was the most active market in California, followed—surprisingly—by the Inland Empire with Los Angeles coming in third for the state.

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.

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