June 21, 2016 Comments Off on Hot Market: Long Beach’s Multifamily with Robert Stepp Views: 650 California News, Los Angeles, West

Hot Market: Long Beach’s Multifamily with Robert Stepp

By Dennis Kaiser

For more on what’s next in the multifamily sector, be sure to register for Connect Apartments 2016. 

Long Beach is emerging as a hot multifamily real estate investment market. Long recognized for its diverse population, vibrant arts and cultural scene, and popular Grand Prix auto race, Long Beach offers a wide mix of residential offerings within proximity to LA and Orange County. Connect Media asked Robert Stepp, principal of Stepp Commercial, why Long Beach now?

LA Stepp

Q: What are the biggest trends driving the Long Beach multifamily market? 

A: Location is driving everything. We’re seeing owners of C-area properties looking to exchange into assets in either better locations with more upside, or properties that offer improved in-place cash flow. As the rental market continues to grow, people seem reluctant to purchase properties in C-areas due to their lack of stability. In contrast, properties located in A-areas such as East Village in DTLB and Belmont Shores continue to trade quickly and at record prices.

As we near the peak of the market, these owners are seizing the opportunity to capitalize on high prices and exchange into assets that offer even stronger returns – such as larger buildings in Class A neighborhoods or NNN properties.

Q: How does the Long Beach market fit into a buyers’ SoCal investment strategy? 

A: First and foremost, Long Beach is non-rent controlled, so that’s a huge draw that translates directly into stronger returns. The city is also undergoing a major transformation and attracting renters who are priced out of other beach side communities like Santa Monica and Manhattan Beach. As a result, rental rates are growing and investors are seeing better returns.

Q: What are the biggest challenges to getting deals done in Long Beach? 

A: With properties trading at a premium, it takes a sharp investor who knows how to renovate and reposition the property to really see the value and potential in some of these deals.

We have one such buyer who has bought several deals from us over the past year – this buyer is new to Long Beach but his entire investment model is based on repositioning assets, so he is able to make sense of some of the deals trading at record prices, where other buyers may not be able to see how they can make it work.

Connect with Stepp Commercial’s Stepp

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