439 N. Hayworth Avenue
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The sale of 439 N. Hayworth Avenue required navigating pricing expectations that were increasingly difficult to justify as interest rates rose. Despite broader market headwinds, the transaction ultimately achieved metrics more commonly associated with the prior market cycle.
Background
439 N. Hayworth Avenue is a fourplex located in the heart of the Fairfax District, one of Los Angeles’ most established and consistently sought-after rental submarkets. The property is situated just blocks from The Grove and within close proximity to Melrose Avenue, Fairfax Avenue, and West 3rd Street, placing it near a concentration of retail, dining, and neighborhood amenities that continue to drive strong tenant demand.
The French Normandy–style property consists of four spacious two-bedroom units averaging approximately 1,175 square feet each. The unit sizes and layout provided clear value-add potential, with approximately 42% rental upside remaining at the time of sale. The surrounding neighborhood has continued to benefit from long-term redevelopment activity, including the planned transformation of CBS Television City.
Ownership elected to sell after experiencing a stepped-up basis under Proposition 19 and engaged Max to guide the process. While the long-term outlook for the area remained favorable, the timing of the sale coincided with a period of rising interest rates and tighter capital markets.
Challenge
The property was brought to market in August 2023 as interest rates approached 7%. Given limited flexibility on pricing, the asset was offered at a 3.17% CAP rate, a 19.54 GRM, and approximately $425 per square foot. These metrics ruled out traditional financing for many buyers and significantly narrowed the pool of qualified investors.
With debt-driven buyers sidelined, the sale required identifying a buyer willing to underwrite the property based on long-term location fundamentals rather than near-term yield.
Result
Through targeted outreach to local principals and operators, Max identified a full-service property management company with an existing portfolio of approximately 1,700 units. The buyer was familiar with the Fairfax District, comfortable operating in low-cap environments, and viewed the asset as a long-term hold anchored by one of the strongest rental locations in the city.
The transaction closed approximately 60 days later at a purchase price of $1,881,000, equating to $470,000 per unit, a 3.44% CAP rate, and an 18.39 GRM. The outcome reflected pricing levels more commonly associated with the 2021 market and underscored the importance of buyer alignment and disciplined execution when marketing well-located assets in a higher-rate environment.
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