Important note
This article is general information based on market data current as of August 2026, not a guarantee of value for any specific property. Individual building values depend on income, condition, documentation, and current comparable sales. Consult a licensed appraiser or broker for a specific valuation before making a financial decision.
Your apartment complex's sale price comes from its net operating income divided by the cap rate buyers are paying in your submarket, not from a flat per-square-foot number. Across LA's pre-1978 building stock, the largest and most active segment of the market, buildings traded at a median 5.87% cap rate and closed at 92.5% of asking price over the past year, on 862 recorded sales. Your specific number moves from there based on vintage, submarket, and how well your income is documented.
I get asked some version of this question almost every week, and the honest answer is never a single number. It’s a formula, and once you understand the formula, you can build a real estimate yourself before you ever call a broker.
The Formula That Actually Sets Your Price
Sale price isn’t your unit count times a round number, and it isn’t your building’s replacement cost either. It’s your net operating income divided by the cap rate buyers are underwriting in your specific submarket. A building earning $200,000 in NOI at a 6% cap rate is worth roughly $3.33 million. The same NOI at a 5% cap rate, the kind of rate buyers pay in a premium submarket, is worth $4 million. Same building, same income, a $670,000 difference driven entirely by where it sits.
Cap rates themselves aren’t static; they move with the broader interest rate environment. The Federal Reserve’s own economic data tracks a real, historical correlation between the 10-year Treasury yield and commercial cap rate movement, which is why the same building can be worth a different amount today than it was two years ago, even with identical income. Your submarket’s specific cap rate reflects local supply and demand on top of that broader trend.
What LA Buildings Are Actually Trading At
The cap rate and price per square foot a buyer will pay depend heavily on when your building was built. Here’s what closed over the trailing 12 months, across three vintage bands:
- Pre-1978 construction (the largest, most active segment): median cap rate 5.87%, median $269.65 per square foot, 862 sales, more than 16 closings a week.
- 1978-2005 construction: median cap rate 5.51%, tighter than either bookend, median $331.99 per square foot.
- Post-2005 construction: median cap rate 5.87%, matching the oldest stock, but a median $412.13 per square foot, reflecting the premium buyers pay for newer, non-RSO product.
Pricing discipline holds across all three: buildings closed at a median 92.5% of asking price, with typical time on market at 109 days. That vintage gap is the first thing that moves your number. An identical unit count in a 1960s building and a 2010s building can sell for very different prices per square foot, even at similar cap rates, because buyers price construction quality and rent-control exposure separately from income yield.
Submarket Moves the Number Just as Much
Vintage sets one axis; location sets the other. A building in South LA trades on the lowest GRM in the city, the strongest cash-flow multiple, while a similar income profile in Silver Lake commands a materially higher price per unit for identical NOI, since buyers there are paying for irreplaceable location as much as current income. I walk clients through their specific submarket’s numbers before we ever discuss a listing price, because a citywide average tells you almost nothing about what your building will actually close at.
Want your building’s actual number, not a citywide average?
Request a free written valuation, and I’ll build your net sheet from your real income, not a formula applied blind.
What Moves Your Price Beyond the Formula
Two identical buildings on paper can sell for meaningfully different amounts, and the gap almost always comes down to documentation and condition:
- A rent roll that matches actual signed leases, not an aspirational version of the income
- Expenses that match tax returns, not a pro forma estimate
- A clear, documented answer on RSO status and any loss-to-lease
- Clean records on retrofit compliance and deferred maintenance
Buildings that arrive with that story already told sell faster and closer to asking. Buildings that make a buyer dig for it get repriced during escrow, usually downward, which is exactly the pattern I walk through in my multifamily due diligence checklist. I build the underwriting story before a building ever goes to market, not after an offer comes in.
I Build Your Number From Your Actual Income, Not a Formula
Hi, I am Max Berger, a multifamily broker at Compass in Los Angeles. I never buy the price, and I never sell the price; I buy and sell the income, and that’s the only number that actually holds up once a buyer’s underwriting team starts checking it. See how real sale prices came together on my success stories page, or browse current property listings to see how I price a building. Contact me or call (818) 321-4972 for your free written valuation.