Dean Zander Dean Zander

Southern California cap rates are among the lowest in the country. According to a new report from CBRE analyzing cap rates, the greater Los Angeles market and Orange County both ranked among the top 10 tier one markets for lowest cap rates in the US. Year-over-year, cap rates compressed across asset class types, but multifamily, which has already experienced substantial cap rate compression, pricing increased only 10%, the lowest of all asset classes in the two markets. Still, cap rates are continuing to trend down, a good sign of investment perspective in the greater Los Angeles area.

“There is an almost insatiable demand for apartment properties and a relative lack of new product is continuing to drive multifamily cap rates down,” Dean Zander, EVP at CBRE, tells “The continued abundance and influx of capital has been one of the primary drivers in suppressing cap rates in Orange County and Greater Los Angeles. Additionally, debt pricing is still very attractive to investors. Other than certain pockets in the urban CORE, we are not seeing a lot of new construction in the pipeline in either markets, which makes the existing stock of product even more enticing to investors. Steady rent growth, helped by the continued increase in jobs and migration to both Los Angeles and Orange County has also been playing a significant factor in keeping cap rates low. Lastly, single-family homes are very expensive in these markets, which in turn begets a significant amount of the population to remain renters.”

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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 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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