California

— By Kalli Knight of Colliers — The Los Angeles multifamily market faces several headwinds, including rising expenses, the aftermath of recent fires, insurance exclusions and Measure ULA. These factors impact transaction volumes, leading many investors to remain on the sidelines. However, Southern California and Los Angeles will continue to have strong fundamentals, attracting a unique pool of buyers. This includes qualified, high-net-worth family offices eager to take advantage of limited competition to acquire new construction at prices below replacement costs or favorable debt terms. Management companies are increasingly critical in supporting property stabilization post-pandemic, with a growing urgency to enhance operations and increase net operating income. As construction loans mature, their impact on property stabilization is significant. Though the concession rate of 0.7 percent is significantly less than the national concession rate of 1.1 percent, many developers now offer four to six weeks of concessions to lease properties and meet projected rents outlined in their financial analyses. Some developers have also opted for creative strategies, such as providing customized closets to attract renters at higher luxury price points instead of relying solely on weekly concessions. Vacancy rates in the market vary, but have generally improved since 2024. They have …