Most LA apartment building owners have no idea what their building is actually worth right now. They either anchor to what they paid for it years ago, reference a neighbor’s residential sale that has no relevance to income property, or rely on a Zestimate that was built for single-family homes. None of these give you a number a real buyer will underwrite.

Here is how buyers actually value your building in 2026.

The Two Numbers Every LA Apartment Building Owner Needs to Know

Price Per Unit

Price per unit is the total sale price divided by the number of units. It is the most common cross-neighborhood comparison tool for mid-size LA multifamily buildings. Based on CoStar Q2 2026 transaction data, here is where the major LA clusters sit:

Gross Rent Multiplier (GRM)

GRM tells you how many years of gross rent it takes to equal the purchase price. Lower GRM means more income relative to price. Higher GRM means the market is pricing in appreciation or scarcity over current income.

The formula works both ways. To estimate your building’s value: multiply your annual gross rent by the median GRM for your cluster. To back into implied rent: divide the median price per unit by the GRM.

A building in Hollywood with $120,000 annual gross rent, at a GRM of 11.37, has an estimated value of approximately $1,364,400. The same rent in South Bay at a GRM of 13.98 estimates to approximately $1,677,600. Same income, different submarket, $313,200 difference.

What Pushes Your Building Above or Below the Median

The median is a starting point. Three factors in LA move your building significantly away from it in either direction.

RSO status is the biggest discount factor. Buildings covered under the LA Rent Stabilization Ordinance typically trade at 0.5 to 1.5 GRM points below comparable non-RSO buildings in the same submarket. Buyers underwrite restricted income growth into their offer. If your building is RSO-covered with rents near the allowable maximum, expect your GRM to sit below your cluster median.

Below-market rents create value through vacancy decontrol. Costa-Hawkins allows rents to reset to market when a tenant voluntarily vacates. In submarkets where controlled rents are 30 to 50 percent below current market, buyers underwrite natural turnover as a direct income recovery path. This can push your price per unit above the cluster median even on an RSO building.

Building condition and compliance create the final adjustment. Deferred maintenance, open code violations, SB 721 noncompliance, and unresolved permits reduce what buyers offer. Clean documentation, recent capital improvements, and confirmed compliance push you toward or above the median.

For the full 21-cluster CoStar data table including median $/SF, $/Unit, and GRM across every major LA neighborhood, read our guide on what your apartment building is really worth in Los Angeles. For current market conditions affecting valuations, see our 2026 LA multifamily market trends report.

The One Number a Real Buyer Actually Uses

Buyers in the LA multifamily market do not start with price per unit. They start with your net operating income and divide by the cap rate to arrive at value. GRM and price per unit are screening tools. Cap rate and NOI are what close deals.

If your building generates $80,000 in NOI and the submarket cap rate for your asset class is 5%, a buyer underwrites your building at $1,600,000. If your operating expenses are higher than a buyer expects, the NOI they calculate will be lower than yours and the offer will reflect that.

The median data in the table above gives you a reliable starting benchmark. A written broker price opinion from someone who has closed deals in your specific neighborhood in the last 12 months gives you a number you can act on.