Research & Market Insights

Los Angeles, CA Industrial Market Report Q2 2026

The Los Angeles industrial market moved further into recovery in the second quarter of 2026, with vacancy easing to 6.5% as record-setting leasing activity outpaced new construction. Anchored by the Port of Los Angeles and Long Beach, the nation’s largest port complex, Los Angeles remains one of the most important industrial markets in the country even as population declines, softer import volumes, and elevated interest rates continue to weigh on near-term demand. Key Findings: Los Angeles Industrial Market Q2 2026 Vacancy remains elevated despite improving leasing fundamentals. Vacancy reached 6.5% as new supply and uneven demand pressured occupancy. Leasing activity hit a record high, with net absorption returning positive following a weak first quarter of 2026. Rents are still declining, but the pace of correction is slowing. Average asking rents fell 4.5% year over year and are down more than 20% from their peak. Landlords continue to offer concessions to attract tenants. Capital is returning to the market as financing conditions improve. Institutional investors and REITs remain active buyers. Limited future construction and expectations for declining vacancy in 2027 are supporting renewed investor confidence. Los Angeles Industrial Market By the Numbers Source: CoStar Group, Inc. Sales Volume: $1.3 billion Asking Rent Per SF: $16.90 Vacancy Rate: 6.50% Rent Growth: -4.50% year over year Average Cap Rate: 5.80% Average Price Per SF: $308 Under Construction: 3.1 million SF Delivered: 263,000 SF Net Absorption: 1.1 million SF Los Angeles County remains one of the nation’s largest and most diversified economies, supported by global trade, entertainment, aerospace, technology, manufacturing, and tourism. While the region has experienced a population decline over the last five years and ongoing affordability challenges, its deep labor pool, world-class universities, and concentration of major employers continue to support long-term economic fundamentals. Industrial Demand Rebounds As New Supply Slows Demand improved across the Los Angeles industrial market during the second quarter, although the recovery remains uneven. Nearly 950 new leases were signed, with leasing volume surpassing 12 million square feet, the highest quarterly total on record. Tenant move-ins exceeded move-outs, resulting in 1.1 million square feet of positive net absorption after more than 3 million square feet of negative absorption in the first quarter. Limited deliveries of just 263,000 square feet helped push vacancy down to 6.5%. Although population declines, softer import volumes, and elevated interest rates continue to weigh on demand, active leasing, declining sublease availability, and a constrained construction pipeline suggest the market is steadily moving toward a more balanced supply-demand environment. Absorption, Deliveries, and Vacancy. Source: CoStar Group, Inc. Los Angeles Industrial Rent Trends As tenants gained greater negotiating leverage, average asking rents declined to $16.90 per square foot, down 4.5% year over year. Rent declines have been most pronounced in port-oriented submarkets such as Long Beach and Carson, while the San Fernando Valley, San Gabriel Valley, and City of Industry have seen more modest pricing adjustments due to limited modern inventory. Although rents remain below recent peaks, the pace of decline has slowed, suggesting pricing is beginning to stabilize as leasing fundamentals improve. Asking Rents Per SF & Rent Growth. Source: CoStar Group, Inc. Construction Activity Slows Across Los Angeles Industrial Submarkets Los Angeles’ development pipeline has contracted significantly from recent highs as developers respond to softer tenant demand and elevated vacancy. Approximately 3.1 million square feet remains under construction, with roughly 40% of the pipeline preleased, reflecting a more cautious approach to new development. Construction activity is concentrated in submarkets with limited modern inventory, including Long Beach, the City of Industry, Santa Fe Springs/La Mirada, Santa Clarita Valley, and Antelope Valley. Most projects range between 100,000 and 250,000 square feet, helping limit future supply growth and support long-term market fundamentals. Construction Starts. Source: CoStar Group, Inc. Los Angeles Industrial Investment Sales Investment activity remains healthy despite ongoing pricing adjustments across the Los Angeles industrial market. Sales volume exceeded $1.3 billion in the second quarter as financing conditions improved and bid-ask spreads narrowed. Average pricing for institutional warehouse transactions remained near $325 per square foot, while the broader market averaged $308 per square foot. Cap rates have expanded into the mid-5% to 6% range, reflecting higher borrowing costs and softer rent growth, though institutional investors and REITs continue to account for roughly 30% of acquisition activity. Looking ahead, constrained supply, improving occupancy fundamentals, and Los Angeles’ high barriers to entry are expected to support values over the long term, though elevated vacancy and slower trade activity remain near-term risks. Investment Volume. Source: CoStar Group, Inc. Performance by Los Angeles Industrial Submarket Source: CoStar Group, Inc. Metric Central/Mid-Cities South Bay/Westside San Fernando Valley Los Angeles County Vacancy 6.4% 7.4% 5.9% 6.5% Asking Rent (SF) $15.75 $18.40 $19.60 $16.90 Rent Growth -4.6% -4.5% -4.4% -4.5% Deliveries (SF) 70K 88K -24K 263K Starts (SF) 160K 180K 0 342K Under Construction (SF) 877K 791K 794K 3.1M Absorption (SF) -173K 627K -586K 1.1M Transaction Volume ($) $557M $235M $228M $1.3B Average Cap Rate 5.6% 6.0% 5.4% 5.8% Average Price Per SF $297 $329 $345 $308 The San Fernando Valley continues to post the strongest occupancy fundamentals with the region’s lowest vacancy rate (5.9%) and highest average asking rents ($19.60/SF), reflecting its limited supply of modern industrial product. Central/Mid-Cities remains the market’s largest investment hub, generating $557 million in sales volume during the quarter. The South Bay/Westside remains the region’s primary port-oriented industrial hub and posted positive absorption during the quarter despite carrying the market’s highest vacancy rate.

Central San Fernando Valley, CA Multifamily Market Report Q3 2025

The San Fernando Valley multifamily market is showing balanced but mixed performance in late 2025, with modest rent softness and varying vacancy levels across submarkets. Vacancy has inched higher in areas with new supply, most notably Sherman Oaks at 6.3% and Van Nuys at 4.7%. Rent growth has been flat to slightly negative in most areas, except Encino, which posted a solid 1.8% annual gain. Development is concentrated in Van Nuys and Sherman Oaks, while construction remains limited elsewhere, helping maintain overall stability. Investment activity continues at a slower pace, with pricing down roughly 15%–20% from 2022 peaks due to higher financing costs. Overall, the market remains fundamentally sound, supported by affordability and steady demand. Key Findings Vacancy rose to 4.8%, up from 4.1% a year ago, as absorption slowed sharply with only 73 units leased over the past 12 months. This uptick signals softer renter demand and lingering lease-up challenges from recent deliveries. Market rents increased marginally by 0.2% year-over-year to an average of $2,126 per unit, indicating flat growth after several years of stronger gains. Affordability concerns and limited renter momentum are keeping rent growth subdued. Sales volume reached $818 million over the past year, with pricing rising slightly to $327,000 per unit and cap rates up to 5.0%. Investor activity remains steady but cautious as higher financing costs pressure deal flow. Demographics Source: CoStar Group, Inc. Unemployment Rate: 6.1% Current Population: 1,815,801 Households: 641,242 Median Household Income: $90,176 Sales Sales volume and pricing in Q3 2025 held firm, signaling steady investor confidence despite broader capital market headwinds. The average sale price per unit increased to $327,000, up 0.5% year-over-year, while total transaction volume reached $818 million across 452 properties. The market cap rate rose slightly to 5.0%, continuing a gradual upward trajectory seen across Southern California as yields normalize. Private investors continue to dominate market activity, while institutional and REIT buyers maintain a smaller but steady presence. Overall, the market remains active, with strong rent fundamentals and limited new supply sustaining its appeal as a stable, long-term investment environment. Sales Volume & Price Per Unit Source: CoStar Group, Inc. Construction Construction activity experienced a modest uptick, with 1,802 units currently underway, representing a 9.1% increase from the prior reporting period. Over the past year, 855 new units were delivered while 1,006 units started construction, signaling measured yet ongoing development momentum. The market’s 28.2% occupancy at delivery suggests steady absorption of newly completed projects. With no demolitions recorded in the past 12 months, the existing housing stock remains largely intact, and overall construction trends indicate a balanced supply pipeline that aims to align with long-term population and income stability in the region. Under Construction (SF) Source: CoStar Group, Inc. By the Numbers Source: CoStar Group, Inc. Sales Volume: $818M Price Per Unit: $327K Cap Rate: 5.0% Vacancy Rate: 4.8% Rent Growth: 1.2% Average Market Asking Rent Per Unit: $2,126 Units Under Construction: 1,802 Units Delivered: 855 Units Absorbed: 73

Los Angeles, CA Industrial Market Report Q3 2025

Los Angeles boasts a diverse and resilient economy rooted in entertainment, tourism, international trade, fashion, and aerospace. Its strong creative and entrepreneurial ecosystem fuels business formation and self-employment, supported by world-class universities like USC, UCLA, and Caltech that supply a steady pipeline of talent. The metro’s trade and logistics sector, anchored by the ports of Los Angeles and Long Beach, remains vital but vulnerable to tariff ﬂuctuations, while tourism continues to thrive, welcoming 50 million visitors annually and generating billions in local spending. Los Angeles Demographics Source: CoStar Group, Inc. Unemployment Rate: 5.7% Current Population: 9,775,675 Households: 3,500,677 Median Household Income: $93,128 Population, Labor, and Income Growth Source: CoStar Group, Inc. Key Findings Despite high land costs and restrictive policies, 4.1 million square feet of industrial space is under construction, with a focus on mid-sized properties. Institutional investors and REITs maintain a 35% market share, and pricing for logistics assets averages $316/SF, signaling steady long-term investment conﬁdence. Los Angeles recorded a population gain of 40,000 in 2024 after population declines occurred in 2021-2023, which is a positive signal for the metro’s recovery. Market Performance Los Angeles’ industrial market has softened, with vacancy at 6.4% in Q3 2025, up from the 1.7% low in early 2022. The increase stems largely from occupancy losses rather than new supply, as demand has weakened due to population decline, retailer bankruptcies, and higher interest rates weakening consumption and housing-related industries. Nearly 30% of the 14 million square feet delivered since 2023 remains vacant, especially in port-adjacent submarkets like Vernon and Commerce. Asking rents have fallen nearly 20% from 2023 peaks, yet a rebound may emerge by mid-2026 if leasing momentum persists and retail sales stabilize. Los Angeles Industrial Supply & Demand Dynamics Source: CoStar Group, Inc. Los Angeles Construction Industrial construction remains constrained by high land costs and strict development policies, limiting large-scale projects within the county. As a result, major logistics developments have shifted to the Inland Empire, leaving Los Angeles with less than 5% of its inventory built in the past decade, compared to the national 18%. While 50.3 million square feet was delivered, demolitions of 33.6 million square feet kept supply growth under 2%. Current construction totals 4 million square feet, with only 20% pre-leased. Developers remain active, focusing on mid-sized projects in areas like Long Beach, Santa Clarita, and the San Fernando Valley despite soft demand and rising vacancies. SF Construction Starts Source: CoStar Group, Inc. SF Under Construction Source: CoStar Group, Inc. Sales Sales activity has slowed but remains steady relative to national trends. Quarterly sales volume totaled about $1 billion in Q3 2025, with annual activity around $4 billion. High ﬁnancing costs, weaker fundamentals, and the ULA transfer tax continue to weigh on transactions. Institutional investors and REITs account for roughly 35% of acquisitions, while user purchases have grown to over 20% of volume. Median pricing for large logistics assets averages $316 per square foot, about 15% below 2022 levels, as cap rates expanded to 5.5–6.5%. Sales Volume Source: CoStar Group, Inc.

Van Nuys, CA Multifamily Market Report Q3 2025

Van Nuys is supported by a mix of industries with a growing focus on healthcare and social assistance, which has become a dominant sector. Other major industries include construction, retail, and manufacturing, along with a notable presence of the ﬁlm industry. While speciﬁc local employers are often small businesses, large companies in the metro include major employers in the greater Los Angeles area, such as Northrop Grumman, Molina Healthcare, and Kaiser Permanente. The metro is home to many families and young professionals. The median household income tends to be average for the city but lower than the county average, and a high percentage of residents rent their homes. Key Findings The asking rent in Van Nuys averages at $1,834 per unit, one of the more affordable rents across the Los Angeles metro. The new development at 6728 Sepulveda Blvd. will deliver 405 units upon delivery in January 2027. This is currently the largest property under construction in Van Nuys. With 633 units on the way, Van Nuys records the greatest construction increase among the San Fernando Valley submarkets, besides Woodland Hills and North Hollywood/Studio City. Van Nuys Multifamily Rents Van Nuys recorded rental rate losses of -0.4% over the past 12 months. The decline in rent growth led to the third quarter’s asking rent level of $1,834 per month. Throughout this year, two-bedroom apartments noted the greatest shifts in rent activity. During the ﬁrst quarter, two-bedroom apartments noted a market rent of $2,176, but then ended the third quarter with a market rent of $2,155. Despite the rent growth drop across Van Nuys, residents remain attracted to the area as its asking rent is lower than other metros across Los Angeles. Market Asking Rent per Unit Source: CoStar Group, Inc. Van Nuys Multifamily Vacancy The metro noted a 4.7% vacancy rate during the third quarter, lower than the Los Angeles vacancy rate of 5.3%. Van Nuys’ vacancy rate can be attributed to increased absorption, with 91 units absorbed during the quarter. This is a large rise from Q2 2025, when only 13 units were absorbed. Studio apartments noted the highest vacancy rate at 7.8%, with three-bedroom apartments recording the lowest vacancy at 4.3%. Moving forward, vacancy is forecast to remain stable, ending the year with an estimated 4.6% vacancy rate. Vacancy Rate Source: CoStar Group, Inc. Van Nuys Construction Activity In the third quarter, the metro saw the addition of 208 new units at The Brightly. The property is a Class A building, and it accounts for one of the largest deliveries of 2025. There are 633 units under construction across Van Nuys, which will expand the metro’s inventory by 2.6% upon completion. While the largest property on the way won’t be delivered until 2027, two properties will be ﬁnalized in November 2025. Villa Vanowen and 14402 Vanowen St. are both underway, and will deliver 64 and 45 units, respectively. Units Under Construction Source: CoStar Group, Inc. Van Nuys Sales Performance Van Nuys recorded $30.8 million in sales volume for the third quarter, an increase from the $28.7 million recorded in Q2 2025. The majority of sales across the metro have been for lower-tier buildings. As such, the largest transaction for Q3 2025 was for a Class C property. The deal was for the building at 6911 Haskell Ave., which is made up of 25 units and sold for $4.7 million. Along with increased sales volume, Van Nuys’ cap rate level also rose from Q2 2025 at 5.80%. Class B properties across the metro noted the highest cap rate at 5.8%. While the current price per unit is at $194K, it is expected to increase, ending the year at a projected $277K per unit. Sales Volume & Market Sale Price Per Unit Source: CoStar Group, Inc.

Daniel Withers

Executive Vice President & Senior Director

10/20/25

Los Angeles, CA Retail Market Report Q3 2025

The Los Angeles retail market in Q3 2025 showed stable activity, with vacancy holding around 6.0% and nearly 600,000 SF under construction to broaden future supply options. Leasing momentum was led by tenants seeking space in newer shopping centers and lifestyle-oriented projects, while older properties faced slower turnover. Retailers remained focused on securing high-traffic locations, especially in coastal and transit-oriented corridors, which continued to support competitive performance across those submarkets. Asking rents averaged $36.50 per SF during the quarter, with rent growth adjusting modestly at -1.2% year-over-year. While rent gains were softer than historic levels, well-located assets continued to attract strong interest, and investment activity totaled $556 million, underscoring steady confidence in Los Angeles retail fundamentals. Key Findings Leasing demand is weak, with net absorption at -491K SF and availability at 6.0%, the highest in a decade, concentrated in older, less competitive properties. Market rents declined -1.2% year-over-year, lagging the national average, though Los Angeles still commands among the nation’s highest retail rates at $36/SF, with wide submarket variation. Suburban markets like the San Fernando and San Gabriel Valleys see modest rent gains, while urban hubs such as West Los Angeles and Santa Monica face declines due to higher availability. Los Angeles Retail Supply & Demand Dynamics Source: CoStar Group, Inc. L.A. Demographics Source: CoStar Group, Inc. Unemployment Rate: 5.7% Current Population: 9,775,632 Households: 3,500,486 Median Household Income: $92,972 Los Angeles, the nation’s second-largest metro, has a diverse economy anchored by entertainment, international trade, aerospace, tourism, and creative industries, supported by top universities and a deep talent pool. While tech and media have seen modest improvement, employment remains below pre-2022 levels, and the entertainment industry faces ongoing challenges. Trade and transportation remain vital through the Ports of Los Angeles and Long Beach, though tariff policy adds volatility. Compounding these headwinds, the devastating January 2025 wildfires, with losses up to $54 billion, will weigh on growth for years as rebuilding unfolds. Population, Labor, & Income Growth Source: CoStar Group, Inc. Los Angeles Retail Construction Los Angeles has experienced limited retail development over the past decade, with inventory growing only 730,000 SF and the pipeline representing just 0.1% of existing supply, well below the national average of 0.4%. Redevelopment has been a key driver, with 5.9 million SF demolished in f ive years, resulting in a net inventory decline of 1.8 million SF. Developers often repurpose obsolete sites, such as 5420 Sunset Blvd., which will deliver 735 housing units and 95,000 SF of retail by 2026. Large-scale projects like the 400,000-SF Los Angeles Premium Outlets in Carson face delays, leaving Class A space in short supply. SF Construction Starts Source: CoStar Group, Inc. SF Under Construction Source: CoStar Group, Inc. Los Angeles Retail Sales In Q3 2025, Los Angeles retail investment remained steady, with sales activity highlighting both traditional centers and redevelopment opportunities. Quarterly sales volume reached roughly 10% above last year’s levels, contributing to a 12-month total of $3.1 billion. Private investors led acquisitions, making up the bulk of buy-side activity, while institutional players were more selective. Notable transactions included UNIMAT Commercial’s $69 million purchase of The Hollywood Collection along the Walk of Fame and CIM Group’s $44 million acquisition of District La Brea. Redevelopment strategies also shaped the market, exemplified by Melia Homes’ $13.7 million purchase in Hawthorne for residential conversion. L.A. Retail Sales Volume Source: CoStar Group, Inc. By the Numbers Source: CoStar Group, Inc. Sales Volume: $556M Price Per SF: $412 Cap Rate: 5.8% Vacancy Rate: 6.0% Rent Growth: (1.2)% Asking Rent Per SF: $36.50 Under Construction: 598K SF Delivered: 118K SF Absorbed: (419K) SF

SoCal Multifamily in Focus: Strategic Opportunities in Los Angeles & Orange County

SoCal Multifamily in Focus: Strategic Opportunities in Los Angeles & Orange County Southern California’s multifamily real estate market is entering a period of pronounced transformation and opportunity. With Los Angeles at the epicenter of technological innovation, infrastructure investment, and global attention—and Orange County maintaining its hallmark consistency and demand stability—investors are faced with two distinct but compelling value propositions. This article explores the evolving dynamics shaping these two powerhouse markets and uncovers the key themes driving Southern California’s multifamily performance in 2025 and beyond. 95% + Occupancy Rate LA REMAINS ONE OF THE TIGHTEST APARTMENT MARKETS NATIONWIDE $5.8B in 2024 Sales LA SECOND ONLY TO NYC 3.17M Residents (+16K in 2024) A RETURN TO GROWTH IN OC AFTER 2021-23 LOSSES 0.4% Rent Growth in OC in 2024 A PAUSE AFTER PANDEMIC-ERA SURGES, BUT STILL 28% ABOVE 2019 Los Angeles A MARKET RECHARGED BY DEMAND, INNOVATION, & GLOBAL MOMENTUM Despite recent negative press, Los Angeles County remains one of the nation’s premier multifamily investment markets. While population loss during the pandemic gained attention, the narrative is more complex. Growth in nearby Riverside-San Bernardino underscores that limited housing, not waning demand, is pushing people outward. Los Angeles remains a highly desirable place to live and work. The county boasts one of the lowest apartment vacancy rates nationwide at 5.0%. A deep pool of young workers supports long-term demand. However, factors like rent control, increased taxation, and rising insurance costs create challenges that investors must navigate. HEADWIND: TAXATION & RENT CONTROL The ULA “Mansion Tax”, which imposes added costs on real estate transactions above $5.3 million, has reshaped investor strategies. Additional rent controls and regulations within the City of Los Angeles have further dis-incentivized investment. “ULA has made investors more cautious on exit. Some are building in a longer hold, others are discounting the exit cap or trying to stay under that threshold entirely,” said Nabil Awada, Vice President and Associate Director. “Staying below the threshold means that owners are less likely to sell at a discount unless they really need to.” “We’re seeing increased investor focus in San Gabriel Valley–strong job base, diverse renter pool, and less restrictive rent policies. Pasadena’s early rent control push in 2022 has actually redirected attention further east,” Awada added. While Pasadena’s 2022 rent control targets buildings constructed before February 1, 1995, newer properties remain exempt, creating opportunity. Despite these policy headwinds, Los Angeles continues to generate reliable returns, and voters have pushed back on further rent control expansion. “Rent control is forcing us to underwrite conservatively—maybe 3% or less annually— and think harder about how we reposition units between tenants,” noted Awada. “For value-add deals, it’s all about repositioning units legally between tenants rather than relying on aggressive rent bumps.” With the passage of AB 1482 in 2019 and the failure of Prop 33, here is where LA rent control laws stand in 2025: Properties Subject to Los Angeles Rent Stabilization Ordinance (RSO) Pre-1978 construction in the City of Los Angeles is subject to RSO Landlords can impose annual rent increases of 4%, plus an additional 1% if they pay for electricity and 1% if they pay for gas Properties Subject to AB1482 Any properties incorporated in Los Angeles County that do not have their own protection ordinance (excluding the City of Los Angeles) Properties in the City of Los Angeles built between 1979 and 2010, with the 15-year exemption rolling forward annually Annual rent increases are capped at 5% plus the local Consumer Price Index (CPI) Exemptions Properties built post-2005 are exempt from any rent control policies, following a rolling 15-year exemption basis Single-family homes and condos remain exempt from local rent control HEADWIND: NATURAL DISASTERS & INSURANCE The 2025 Pacific Palisades and Eaton wildfires displaced over 150,000 residents and destroyed 16,000+ structures. In their aftermath, demand surged in submarkets like West Los Angeles, with spiking rents and vanishing vacancy. “Investor interest has shifted toward fire-safe zones–the South Bay is gaining more attention because they weren’t affected by fires, and cities like Redondo Beach, Gardena, and Torrance have strong fundamentals,” said Awada. South Bay CRE Sales Surge in 2025 Source: CoStar Group, In. & The MLS | YTD = Jan 1, 2025 – May 22, 2025 Market Sales Volume YTD 2024 Sales Volume YTD 2025 % Increase Redondo Beach $31.4M $58.6M 87% Gardena $30.5M $48.8M 60% Torrance $40.9M $49.6M 21% Rebuilding could take years as new development will be slow to replace lost housing stock. The resulting supply shock has boosted rental income potential and elevated property values across affected and adjacent areas, offering near-term momentum for multifamily owners, operators, and developers. “With insurance premiums climbing in high-risk zones, I think we’ll see interest hold steady for at least another year or two–especially while there’s room to modernize units and push rents without competing with a ton of new supply,” said Awada. At the same time, these wildfires have underscored the growing risk profile of investing in natural disaster-prone markets like Southern California. The financial hit on insurers is expected to ripple through the broader market. Awada notes the financial impact: “Insurance premiums are rising sharply–20 to 40% increases aren’t uncommon–and that’s directly affecting underwriting.” Investors should anticipate a sharp increase in insurance premiums, which will inflate operating expenses and weigh on underwriting. Roughly $1.3 billion in CMBS-backed commercial real estate lies within fire evacuation zones, and while lenders are unlikely to adjust strategy immediately, persistent natural disaster risk could lead to higher lending premiums or tighter financing terms—particularly if insurers begin pulling back coverage across Los Angeles County. TAILWIND: HOUSING SHORTAGE Los Angeles’ chronic housing shortage remains a powerful driver of demand. According to Zillow, Los Angeles has the second-largest housing shortfall nationally, trailing New York City. With single-family home prices averaging $940,000, affordable to just 2.8% of renters, the metro is creating a higher-income rental base. Housing supply remains far behind demand: 22,000 units are under construction, but the shortfall ranges from 300,000 to 500,000 units. “Construction slowdowns and supply constraints are the dominant forces in the market,” Awada emphasized. “We’re going to see tighter occupancy, more demand for workforce housing, and likely some distress-driven sales as loans mature.” Vacancy is expected to tighten 20 basis points each of the next two years, reaching just 4.7% by the end of 2026. Rent growth is expected to land just shy of 4% in 2025, even with the potential for increased rent control measures. With limited homeownership options and rent control impeding new supply, multifamily owners are poised to benefit from enduring tightness. Los Angeles Housing Shortage Stalls Amid National Gains Source: Zillow Metro Area Housing Shortage Change in Housing Shortage YOY (#) Change in Housing Shortage YOY (%) % Non-Homeowner Households That Could Afford Typical Mortgage United States 4,540,773 256,847 6.0$ 15.1% New York , NY 389,924 13,548 3.6% 9.3% Los Angeles, CA 336,728 2,866 0.9% 2.8% Chicago, IL 97,379 9,946 11.4% 22.0% Dallas, TX 48,150 528 1.1% 14.5% TAILWIND: DEMOGRAPHICS UNDERSCORE ENDURING DEMAND Los Angeles County’s nearly 10 million residents offer significant scale and strength for multifamily investors. After peaking at 2.2% during the pandemic, annual move-outs have dropped to just 0.3%. Higher than average incomes are the most notable factor for LA renters, allowing owners to provide high-end housing options at rates far larger than the national average rent. Los Angeles renters earn $10K more than the national average, supporting rental rates that are 32% above the national average. And with the median age of 36 (versus the U.S. average of 39), the metro’s larger Gen Z and millennial population supports household formation and apartment demand. “The demand we’re seeing from younger renters and tech workers is unlike anything I’ve seen in the last decade,” said Awada. “LA has become a lifestyle market–and these high-income renters are keeping occupancy tight even in newer Class A stock.” With average household sizes larger than the national norm (2.8 vs. 2.5), LA’s constrained supply continues to suppress household formation, further fueling future multifamily demand. TAILWIND: LOS ANGELES 2.0 Los Angeles is expanding beyond its entertainment roots, emerging as a tech powerhouse in AI, cloud computing, and cybersecurity. This shift has increased demand for amenity-rich, centrally-located rentals. “As tech spreads beyond Silicon Beach, tenants are chasing convenience and transit-oriented locations,” said Awada. “Mid-market demand is growing fast in places like West Adams, Koreatown, and Inglewood–areas with upside and access.” The average tech salary in Los Angeles now exceeds national benchmarks, supporting robust demand for both premium and mid-market multifamily assets. This job growth has played a critical role in stabilizing Class A occupancy, even amid a surge of new deliveries in 2024, and has helped fuel sustained leasing velocity throughout the metro. “For Class A, developers are targeting walkable, amenity-rich pockets near transit and coworking spaces,” said Awada. The upcoming Summer Olympics in 2028 and FIFA World Cup in 2026 are also catalyzing infrastructure improvements and investor interest. These global events are driving an ambitious infrastructure agenda, most notably the “Twenty-eight by ’28” plan, which will modernize transportation networks, upgrade neighborhoods, and enhance citywide connectivity. “Investors are eyeing transit corridors and Olympic-adjacent zones for value-add plays and short-term rental potential,” said Awada. TAILWIND: LA COUNTY APARTMENT INVENTORY OPTIONS FOR EVERY INVESTOR Los Angeles’ inventory includes the nation’s highest concentration of small apartment buildings (under 25 units), enabling easier entry for private capital. While the market includes institutional-grade properties, this diversity adds resilience and liquidity. “Private capital is active in the Valley, South Bay, and Long Beach–looking for value-add deals where prices are soft but demand is solid,” Awada explained. “It’s institutional capital that’s turned cautious, especially post-ULA.” Entry costs can vary anywhere between $200,000$600,000+ per unit from the San Fernando Valley all the way to Long Beach. Despite the market’s reputation as a high-cost metro, smaller and more cost-effective options mean investors from all over the country can acquire properties in Los Angeles. Deal variety like this provides options whether a syndicator with a 5-year time horizon, a private investor looking for long-term passive income, or a larger institution looking for a stable and safe return on capital. TAILWIND: MARKET LIQUIDITY REMAINS AMONG THE HIGHEST IN THE NATION Despite the national slowdown in deal flow resulting from the rapid increase in the Federal Reserve overnight rate, Los Angeles County remains one of the most active apartment markets in the country. In 2024, nearly $5.8B changed hands for LA apartments, trailing only the New York City Metro, which includes parts of New Jersey and Connecticut. Los Angeles records four times more transactions than San Francisco and 2.5 times more than the entire Bay Area. “We’re seeing more sellers meet the market now, and buyer activity has stayed surprisingly strong considering the macro headwinds,” Awada commented. Orange County A MARKET DEFINED BY STABILITY, AFFLUENCE, & SUPPLY CONSTRAINTS Orange County’s multifamily market continues to be one of the most resilient and desirable in the U.S., distinguished by persistently tight vacancy, a highincome tenant base, and strong investor demand. While rent growth has plateaued after a pandemicera surge, occupancy remains near historical highs, reflecting the county’s enduring appeal. These tight conditions are driven by consistent job creation, limited housing supply, and a chronic affordability gap that keeps a growing portion of the population in rentals. Despite affordability and policy-related headwinds, the county’s fundamentals position it as a defensive, long-term play for multifamily investors. “Orange County investors like the economic demographics, general county policies, rental market stability, and value stability,” says Mark Bridge, Executive Vice President. “Whether during the 2008 financial crisis or the COVID collections of 2020, Orange County stood the test better than its Southern California neighbors.” He adds that “Orange County rent growth has often been in the top 10 nationwide, and values have historically declined slower and rebounded faster than surrounding counties.” As of late 2024, the apartment vacancy rate hovered around 4%, making Orange County the second-tightest rental market among the top 50 metros in the U.S. HEADWIND: AFFORDABILITY CONSTRAINTS IMPACT CLASS A PRODUCT Affordability remains a defining pressure point in Orange County’s multifamily landscape, especially for Class A and luxury assets. Renters are increasingly cost-burdened, and the income needed to afford market-rate units continues to rise. As of Q2 2025, the average asking rent in Orange County reached $2,730 per month, a 25% increase since Q4 2019. To rent without being cost-burdened, a household must earn $54.94 per hour, 3.3 times the state’s minimum wage. “The cost of housing in Orange County is sky-high, and is a major barrier to middle-income families,” says Mark Bridge. “That’s why Class B and C assets are in such high demand, they’re the only housing option left for much of the local workforce.” This pricing ceiling is particularly relevant as Orange County has one of the highest shares of Class A inventory among major U.S. markets. As of Q2 2025, over 6,400 Class A units are under construction, representing 2.5% of the county’s 250,000-unit apartment base. In submarkets like Newport Beach, over 40% of its housing supply is high-quality Class A buildings. Although this is below the national average of 3.0%, and significantly below the 6% to 12% under construction in the nation’s five most active markets, the pipeline is still substantial, especially given Orange County’s historic supply constraints. “Orange County is an infill development location,” Bridge explains. “Most Class A development is happening on underutilized or vacant lots.” But even these infill opportunities are limited. In November 2024, for example, a proposed 500-unit development in Anaheim Hills was rejected due to density concerns and the neighborhood’s wildfire evacuation risk highlighting the difficulty of bringing large-scale supply online even in a market with sustained demand. As these new Class A units enter lease-up phases, landlords may face slower absorption and need to offer more concessions to fill units. The affordability ceiling also limits future rent growth prospects in this segment, as more tenants seek attainable alternatives in Class B and C properties. HEADWIND: REGULATORY PRESSURE & SUPPLY-SIDE CHALLENGES Alongside affordability, regulatory pressure and development challenges continue to weigh on multifamily investment and construction. Despite statewide efforts to promote pro-housing policies, including ADU reform and density bonuses, Orange County’s approval processes remain slow and inconsistent. “The entitlement process is still a hurdle, land costs remain high, and despite funding increases, we’re not producing enough units–especially for low-income renters,” says Bridge. While California has boosted support for housing production and preservation, reaching $249 million in Orange County in 2025, up 50% year-over-year, those gains still fall short of addressing the County’s estimated 121,000-unit shortage for low-income renters. The region also faces deepening challenges around the loss of affordable development pipelines. Low-Income Housing Tax Credit (LIHTC) production and preservation dropped 61% between 2023 and 2024, severely limiting progress toward affordability goals. That drop comes just as the county grapples with alarming cost burdens: 81% of extremely low-income households pay more than half of their income on housing, compared to only 3% of moderate-income households. Meanwhile, Santa Ana remains the only city in the county with stricter rent control than California’s AB 1482, capping rent growth at 80% of CPI or 3% annually since 2021. “Santa Ana’s rent control caused a larger decrease in pricing and slowed transaction velocity,” Bridge notes. “That aside, Santa Ana values have ticked up slightly from the bottom as the market adjusts post-rate hike.” Despite the policy headwinds, Orange County’s underlying fundamentals, tight vacancy, economic diversity, and high barriers to entry continue to attract capital. However, rising interest rates have compressed investment returns, pushing average cap rates to around 4.4% and narrowing spreads, particularly for institutional-grade assets. Deal velocity has slowed in many submarkets, but liquidity remains strong in coastal areas like Irvine and Newport Beach, where institutional interest has persisted. Where OC rent control laws stand in 2025: In Santa Ana, rent growth is capped at 80% of CPI or 3% annually, whichever is lower. TAILWIND: POPULATION GROWTH & DEMOGRAPHIC RESILIENCE Orange County’s population is once again trending upward, reinforcing long-term demand for multifamily housing. In 2024, the county added nearly 16,000 new residents, a 0.5% gain that marked a clear reversal from the average -0.3% annual population losses between 2021 and 2023. This growth brought the total county population to 3.17 million. Several of the county’s largest cities drove the expansion. Irvine led with a population increase of more than 3,600, followed closely by Santa Ana (+3,500), Garden Grove (+2,200), and Anaheim (+1,700). Stanton recorded the fastest percentage growth, jumping 3.6% thanks in part to new developments like Cloud House, a 321-unit apartment community featuring Orange County’s most expansive rooftop deck. This return to population growth has translated directly into tightening multifamily fundamentals. In Irvine, stabilized apartment vacancy stands at just 3%, well below the county average of 4.1%. Projects like the 287-unit Enzo from TX partners and the upcoming 876-unit Volar by Garden Homes are helping to meet demand, but Orange County’s housing pipeline remains too limited to shift overall market dynamics meaningfully. Supporting this demographic momentum is Orange County’s diverse, high-wage economy, anchored by leading employers across sectors like tourism, healthcare, education, and technology. Major firms including Disney, University of Irvine, Broadcom, Edwards Lifesciences, and Providence Health ensure job stability and sustained household income growth. By the end of 2024, job growth was tracking at 1.4% annually, with unemployment under 4.5%—outpacing both state and national benchmarks. These jobs support a median household income of approximately $116,000, yet with median home prices exceeding $1.2 million and mortgage payments nearly double the average apartment rent, home ownership remains out of reach for a large share of the population. In fact, roughly 75% of local residents cannot afford a median-priced home, making “rentership” the default housing strategy for many. Orange County’s demographic profile adds further strength to its multifamily appeal. While the region experiences modest domestic outmigration due to its cost of living, this is offset by strong international immigration, a high birth rate, and growing numbers of young professionals and college graduates. Millennials and Gen Z are continuing to form households, and a rising number of empty nesters are downsizing into high-quality rentals. These trends are expanding the county’s renter base across both age and income segments. Additionally, Orange County has a high educational attainment and robust professional job growth, supporting a deep pool of tenants with the financial capacity to sustain elevated rents. As Mark Bridge notes, Orange County’s stable economy and diverse demographics are foundational to its long-term investment appeal. TAILWIND: CLASS B & C STRENGTH, CLASS A STABILIZING Orange County’s multifamily market is increasingly defined by a split between high-cost and attainable housing. Class B and C assets—largely built from the 1960s to 1980s—are outperforming due to their relative affordability. With vacancy between 2.5% and 3.0%, these units are near full occupancy and continue to record modest but steady rent growth (1% to 2%). The Class Divide in OC Source: CoStar Group, Inc. Units Vacancy Rate Rent Class A 76,768 5.5% $3,272 Class B 86,996 3.8% $2,691 Class C 95,734 3.3% $2,104 “Class B and C properties benefit from a broader renter base seeking affordability in OC’s high cost of living,” Bridge says. Class A buildings, particularly recent deliveries in Irvine and Anaheim, saw some softness but are showing signs of stabilization. Rents across the county rose only 0.4% in 2024—a modest increase, but one that leaves average rents nearly 28% above pre-pandemic levels. “Everyone is looking for value-add deals in OC,” Bridge notes. “That’s the play in today’s market. Turnkey deals are tougher to move.” Meanwhile, active development continues in key hubs. Irvine has more than 4,000 units in the pipeline. Anaheim’s $4B+ ocV!BE project will bring housing and entertainment to the Platinum Triangle. Santa Ana’s transformation is accelerating with the OC Streetcar, and major highway and infrastructure upgrades are enhancing both access and livability countywide.

Nabil Awada

Vice President & Associate Director

8/21/25

Q225 | Multifamily Market Report | San Fernando Valley, CA

Q2 2025 San Fernando Valley Multifamily Market Report Highlights The San Fernando Valley multifamily market recorded 1.3 percent rent growth in the second quarter, nearly doubling the Los Angeles metro’s 0.7 percent. Properties across the Valley are steadily selling, with total sales reaching $586 million, as investors show growing interest in the area—often favoring it over more expensive core metro markets. Van Nuys, Sherman Oaks, and North SFV are leading development zones, driven by transit access, luxury project demand, and available land with flexible zoning. By the Numbers Sales Volume: $586M Cap Rate: 5.04% Market Sale Price Per Unit: $286,033 Vacancy Rate: 3.85% Rent Growth: 1.3% Market Asking Rent Per Unit: $1,991 Unit Under Construction: 1,756 Unit Absorbed: 301 Unit Delivered: 145 | Q2 2025 | Source: CoStar Group Market Performance The multifamily sector remained solid throughout Q2 2025, supported by a balanced supply-demand environment and a stabilizing vacancy rate of 3.85%. With minimal drag from new deliveries, renter demand held firm—approximately 145 units were absorbed, even as 301 new units entered the market. Quarterly rent growth of 1.3% reflects the Valley’s relative affordability and measured pace of new construction, with particularly strong occupancy trends in Central SFV and North Hills sustaining leasing momentum. Leasing conditions remained steady across most product types, with Class B and well-located Class A properties attracting the strongest tenant demand. A limited construction pipeline in several submarkets has kept concession pressure low, benefiting landlords and stabilizing pricing. Overall, the Valley remains fundamentally well-positioned, with healthy market performance and a competitive edge within the broader Los Angeles rental landscape. Market Asking Rent Per Unit and Rent Growth Source: CoStar Group Inc. Under Construction The San Fernando Valley’s supply pipeline is moving at a healthy, controlled pace, with 1,756 units currently under construction. Development is concentrated in key areas like Van Nuys, Sherman Oaks, and North SFV, where aging commercial properties, transit-connected corridors, and targeted zoning have created new opportunities for multifamily growth. With absorption outpacing deliveries, the pipeline remains manageable—supporting rent stability and reinforcing the region’s long-term market health. Net Absorption, Net Deliveries, and Vacancy Source: CoStar Group Inc. Sales Sales activity remained solid in Q2 2025, with $586 million in multifamily transactions recorded across the San Fernando Valley. Average pricing fell to $286K/unit, reflecting post-peak normalization while value-add and workforce housing drew strong demand. Cap rates rose to 5.04%, but affordability and stability kept the Valley attractive over core Los Angeles submarkets. Active bidding and consistent deal flow continue to signal confidence in the area’s long-term performance. Sales Volume and Market Sale Price Unit Source: CoStar Group Inc. Top 10 Sales Comps of Q2 20225 Source: CoStar Group Inc.

Q225 | Retail Market Report | Los Angeles, CA

Q2 2025 Los Angeles Retail Market Report Highlights Outmigration remains a central challenge to Los Angeles’ economic growth, with the region’s population declining by over 3%, weighing heavily on household formation and retail demand. Among the hardest-hit U.S. markets, Los Angeles experienced one of the steepest declines in retail demand, with tenants shedding 2.5 million square feet of space over the past year amid ongoing economic and consumer headwinds. Suburban retail markets are showing greater resilience, while urban cores like Santa Monica and West L.A. continue to struggle with elevated vacancies and year-over-year rent declines. By the Numbers Sales Volume: $811M Cap Rate: 5.7% Market Sale Price Per SF: $417 Vacancy Rate: 5.9% Rent Growth: -0.7% Market Asking Rent Per SF: $36.60 SF Under Construction: 643K SF Delivered: (4.2K) SF Absorbed: (174K) Vacancy Rate Source: CoStar Group, Inc. Los Angeles Demographics Unemployment Rate: 6.0% Current Population: 9,771,283 Households: 3,497,992 Median Household Income: $91,909 Market Performance Despite persistent headwinds, Los Angeles retail continues to adapt within one of the more challenged U.S. property sectors. Rent growth fell to -0.9% year-over-year in Q2, down from -0.4% in Q1 and well below the 2.0% national average. Vacancy held at 5.9%, but availability ticked up to 6.4%, signaling more space may soon hit the market. Sales volume rose to $811 million—a modest rebound, though still below the $1.1B 10-year quarterly average. Urban cores like West Hollywood, Santa Monica, and Downtown L.A. remain sluggish amid elevated vacancies and soft tenant demand. Santa Monica leads major submarkets with a 16% vacancy rate, while tourism-reliant districts such as Beverly Hills and Hollywood exceed 9%. Common challenges—reduced tourism, high costs, and safety concerns—continue to stall recovery. Suburban markets like Glendale and Torrance are outperforming with vacancy near 4%, while the San Fernando and San Gabriel Valleys see modest rent gains tied to stable, service-based demand. Though vacancy may rise further this year, tenant interest remains focused on these stronger submarkets. Under Construction Retail construction in Los Angeles remains limited in Q2, with just 0.1% of inventory—or 640,000 SF—underway, following recent project stalls. Over the past decade, retail growth has averaged only 180,000 SF annually, with demolitions nearly offsetting new deliveries. Developers continue to favor adaptive reuse and mixed-use projects over ground-up. Notable developments include the 735-unit mixed-use project at 5420 Sunset Blvd. and the 375,000-SF West Harbor waterfront destination in San Pedro, set to open in 2026. Sales Despite soft leasing fundamentals, investors remain active in well-located, land-rich, and necessity-driven retail. Sales volume rose by $74 million quarter-over-quarter, reflecting a modest rebound led by grocery-anchored centers, triple-net leases, and redevelopment-driven assets. Caution is still the overarching theme, with private and regional buyers driving most of the activity, while institutional players stay on the sidelines amid cap rates holding between 5.0% and 5.5%. Key Q1 2025 trades like District La Brea and Foothill Park Plaza continue to shape sentiment. New details reveal Philips Edison & Co. acquired 43,600 SF of Foothill Park Plaza for $31.25 million at 85% occupancy. CIM Group’s $44 million District La Brea purchase included 82,000 SF of retail, a three-story garage, and tenants like Sugarfish and Arc’teryx, backed by a $28.5 million loan at 65% LTV and a 35% discount from its 2016 sale price. In the net lease segment, previously noted trades like Pollo Campero ($3.55M at 5.1% cap) and Starbucks ($2.75M at 5.5% cap) highlight continued demand for credit-tenant assets. Redevelopment remains a key motivator, illustrated by Melia Homes’ $13.7 million purchase of a 13,300-SF Hawthorne site slated for residential conversion. Sales Volume and Market Sale Price Per SF Source: CoStar Group, Inc. 12-Month Market Leaders: Top 25 Performing Submarkets

Q125 | Retail Market Report | Los Angeles, CA

Q1 2025 Los Angeles Retail Market Report Highlights Los Angeles faces major long-term economic setbacks due to the January wildfires, causing over $54B in damages. Retail rents in Los Angeles remain among the highest in the nation, averaging $37/SF, 40% above the national average—despite declining demand. Due to high housing costs, a population plateau, and an unsteady market, demand for retail space has declined. Los Angeles has lost about 2.4M SF of leased space over the past year By the Numbers Sales Volume: $737M Cap Rate: 5.7% Market Sale Price Per SF: $416 Vacancy Rate: 5.8% Rent Growth: -0.4% Market Asking Rent Per SF: $36.63 SF Under Construction: 650K SF Delivered: 430K SF Absorbed: -2.4M Vacancy Rate Los Angeles Demographics Unemployment Rate: 6.0% Households: 3,497,433 Current Population: 9,770,563 Median Houshold Income: $91,658 Market Performance The Los Angeles retail sector started the year as one of the worst-performing among major U.S. property types, with vacancy rising to 6.3% and rent growth falling to -0.4% year-over-year—underperforming the national average of 1.9%. Sales volume dropped to $737 million in Q1, well below the 10-year quarterly average of $1.1 billion. Urban cores like Santa Monica and Downtown L.A. are seeing a 3.3% drop in population. With high rent, reduced foot traffic, and concerns over crime, retailers are hesitant to expand in the current market as the Sunbelt sees higher-growth in household formation. Momentum remains soft, but areas across the San Fernando Valley and San Gabriel Valley show modest, year-over-year rent gains. With limited exposure to tourism, private buyers are targeting smaller-format, service-oriented retail with long-term upside potential. Suburban areas are experiencing an increase in demand, attracting more value-focused and necessity-driven tenants. Under Construction Retail construction in Los Angeles remains subdued, with only 650,000 square feet underway—representing only 0.1% of total inventory. Most of this activity involves small-scale redevelopments or mixed-use projects that replace outdated retail rather than ground up retail expansion. The standout project is West Harbor in San Pedro, a waterfront dining and entertainment destination slated to open in 2026. Given the region’s entitlement hurdles, elevated land prices, and complex permitting environment, developers are increasingly focused on adaptive reuse and repositioning of existing retail footprints. Sales Even with overall deal volume below historical norms, the market isn’t completely frozen over. Philips Edison & Company purchased portions of Foothill Park Plaza in Monrovia for $31.25 million. CIM Group acquired District La Brea for $44 million— 35% below its 2016 sale price—reflects a steep value correction driven by operational decline. Between 2022 and 2024, NOI per square foot decreased by more than 70% across the portfolio, with effective gross income dropping from $33.50/SF to just $9.47/SF. Net lease transactions included a Pollo Campero in Bellflower and a Starbucks in Long Beach, both trading at cap rates near 5%, a level not seen in a decade. This marks a clear departure from pre-pandemic norms, where similar assets are often sold at yields below 4.5%, and reflects a market where investors are repricing risk and demanding more substantial returns. In Hawthorne, Melia Homes acquired a 13,300 SF retail parcel with plans to redevelop the site for residential use. While the forecast anticipates market conditions to remain softer, buyers are proceeding with caution to find opportunities despite expectations of limited occupancy and rental rates. 12-Month Sales Volume Market Sale Price Per SF 12-Month Market Leaders: Top 20 Performing Submarkets

Q125 | Multifamily Market Report | Van Nuys, CA

Q1 2025 Van Nuys Multifamily Market Report Highlights Van Nuys multifamily continues to appeal to renters seeking greater aﬀordability relative to Los Angeles averages. Asking rents in Van Nuys average $1,845 per unit. Looking ahead, the largest multifamily project slated for delivery is a 208-unit Class A development, expected to be completed in April 2025. Investment activity during the ﬁrst quarter of 2025 was headlined by the sale of a Class C property, which traded for $4.9 million. By the Numbers Units Delivered: 0 Units Absorbed: 154 Units Under Construction: 358 Vacancy Rate: 3.1% Rent Growth: 0.8% Market Asking Rent Per Unit: $1,845 LA County Demographics Employment Rate: 61.3% Current Population: 10,014,009 Households: 3,450,470 Median Household Income: $86,587 Construction The Van Nuys multifamily construction pipeline has slowed down, with no units delivered in Q1 2025. However, unit growth on a percentage basis in Van Nuys recorded the highest level among the San Fernando Valley’s submarkets, besides Woodland Hills and North Hollywood/Studio City. Once the 358 units currently under construction are completed, Van Nuys’ unit count will increase by 1.5%. The largest property under construction is The Brightly, which comprises 208 units. The apartment complex is expected to deliver in April, and will be a Class A property. It will feature a mix of studio to 3-bedroom units, and will have an asking rent of $2,642 per unit. Vacancy and Rent Van Nuys’ vacancy rate remained stable throughout 2024, and this continued during Q1 2025 with a vacancy rate of 3.1%. The stabilization for its vacancy level can be attributed to the decrease in deliveries, which could change once the units under construction are ﬁnalized. Rent growth also remained stable throughout the past year and into Q1 2025, with rent growth at 0.8%. The current average asking rent of $1,845 is around 20% lower than Los Angeles, which draws residents seeking lower rents to the area. Sales Transaction volume in Van Nuys recorded $14.1 million during Q1 2025. Sales activity for this quarter decreased from 2024 levels, speciﬁcally the $31.7 million transacted in Q1 2024. The slowdown in transactions is likely due to increased debt costs and property taxes implemented by the City of Los Angeles on property sales. The average market price has also declined, recording a level of $270,000 per unit. The largest sale in Q1 2025 occurred at 8030 Langdon Ave. The Class C property traded for $4.9 million, or $148,485 per unit, with a 4.6% cap rate.

Daniel Withers

Executive Vice President & Senior Director

4/16/25

Multifamily Markets in 2025: Navigating Oversupply, Rebounding Demand, and Institutional Revival

U.S. Multifamily Market Trends 2025 As U.S. multifamily market trends evolve, a clear narrative emerges: the sector is recalibrating after an era of hypergrowth. Across the Sunbelt, Midwest, and coastal metros, rising vacancy rates, tempered rent growth, and a sharp slowdown in construction activity have created a bifurcated landscape. While many cities face supply overhangs, others are benefiting from demographic tailwinds, resilient demand, and the re-entry of institutional capital. This article breaks down the multifamily dynamics across key U.S. markets and outlines the strategic shifts shaping investment and development activity in the year ahead. Sunbelt Metros: Supply Surges Meet Growing Pains Atlanta, Nashville, and Jacksonville Atlanta has witnessed a dramatic spike in vacancy rates—rising from 5.5% in 2021 to 12.5%—due to an onslaught of new Class A supply. Rents have fallen across luxury assets, with concessions such as two months’ free rent now commonplace. Similarly, Nashville added 13,000 units in 2024—nearly double its 10-year average—leading to elevated vacancy and softened rent growth. Jacksonville, too, is facing growing pains: a 13.4% vacancy rate underscores oversupply concerns, although a construction slowdown and rebounding rent projections into 2025 offer signs of recovery. Tampa, Fort Lauderdale, and Miami Tampa leads Florida markets in construction, delivering over 10,500 units by late 2024. Though vacancies remain elevated, investor interest in premium assets like The Pointe on Westshore continues to surge. In Fort Lauderdale, affordable submarkets outperformed luxury areas, highlighting a growing affordability divide. High absorption and strong investor interest suggest resilience despite moderating fundamentals. Austin, Dallas-Fort Worth, and Houston Austin remains the most oversupplied market nationally, with a 15.3% vacancy rate despite record absorption. New construction has slowed sharply, which may help the market recover by mid-2025. Dallas-Fort Worth (DFW) and Houston echo similar dynamics: robust demand (15,200 and 20,000 units absorbed, respectively) has been overshadowed by new supply, keeping vacancy rates above 11%. Southeast and Midwest Markets: Rebalancing in Progress Louisville and Birmingham Vacancy rates climbed in both cities due to aggressive new deliveries. Louisville’s rent growth remains healthy at 3% despite a 13% vacancy rate in Southern Indiana. Birmingham‘s adaptive reuse trend—converting offices into apartments—reflects creative responses to market saturation. Rent growth has slowed to 0.5%, and investor activity remains tepid. Chicago and Cleveland Chicago presents a rare picture of stability. With a 5.3% vacancy rate and low construction activity, it has emerged as one of the most balanced multifamily markets in the U.S. Cleveland, meanwhile, is rebounding: 2024 saw record absorption and leading rent growth at 3.2%, despite a market-wide vacancy of 8.3%. Private investors are increasingly driving transactions amid institutional caution. Minneapolis A tale of two markets: suburban areas are thriving, while downtown vacancy remains high due to safety concerns and changing work patterns. Overall, the metro’s vacancy rate dropped to 7.5% in 2024, and suburban rent growth continues to support market stability. Western Markets: Pressure Mounts Despite Strong Demand Phoenix and Denver Phoenix saw 18,000 units absorbed in 2024, but the addition of 22,000 units kept vacancies at 11%. With 27,000 more units under construction, oversupply concerns loom. Denver posted record absorption but continues to battle a pipeline of 91,000+ units, keeping the metro’s vacancy rate at nearly 11%. Both markets are seeing a shift toward smaller, more affordable investment targets. Los Angeles and the San Fernando Valley Los Angeles faced a devastating wildfire crisis that destroyed 10,000+ structures, driving expected rent hikes of up to 12% in 2025. The San Fernando Valley stands out with the lowest vacancy rate in California at 3.6% and outsized investor activity totaling $2.5 billion. San Diego and Sacramento San Diego‘s housing shortage persists despite improved absorption. Rent growth is sluggish at 0.6%, with affordability concerns prompting shared housing trends. Sacramento, on the other hand, has seen improving Class A demand and a vacancy drop to 6.5%, fueled by slowed construction and rising rents. East Bay and Orange County The East Bay continues to grapple with high-end rent declines (-2%) but shows promise through slowing construction and increased investor confidence. Orange County remains resilient with a 4.2% vacancy rate and one of the most expensive, yet stable, rent markets in the country. Northeast: Resilient Giants and Transit-Oriented Expansion Brooklyn and Manhattan Brooklyn’s vacancy rate of 2.6% remains among the lowest nationally, supported by strong absorption and modest rent growth (2%). Manhattan mirrors this trend, with 7,000 units absorbed in Q2 2024 and average rents exceeding $3,200. Investors are laser-focused on premium assets in these rent-stabilized, supply-constrained markets. Northern New Jersey New Jersey is experiencing record absorption with a skew toward luxury units. However, affordability challenges persist, prompting investment in transit-oriented developments like Vermella Broad Street and The Crossings. Payroll growth and a strong job base are supporting long-term multifamily strength. Institutional Capital Reawakens in 2025 Following a two-year pause, institutional investors are reentering the multifamily space. Blackstone’s $10 billion acquisition of AIR Communities in 2024 was a signal of confidence. With interest rates declining and alternative lenders stepping in, capital is unlocking for core and core-plus deals. Markets with stable fundamentals—like Chicago, Orange County, and parts of the Sunbelt—are attracting early waves of institutional funding. Strategic Focus Areas Geographic Shift: Sunbelt cities with paused pipelines and strong absorption (Austin, Jacksonville) are back in focus. Asset Selection: Workforce housing and mid-market suburban assets are outperforming luxury units in both demand and investment return. Development Retrenchment: Construction starts have fallen nationally, creating a more favorable leasing environment and room for rent growth. Understanding the shifting dynamics in U.S. multifamily market trends 2025 is essential for developers and investors aiming to time their reentry and capitalize on tightening supply-demand conditions. Outlook: Rebalancing Today, Growth Tomorrow While U.S. multifamily market trends across the U.S. are at varying stages of recalibration, the underlying fundamentals remain strong. Population growth, job creation, and homeownership constraints continue to fuel renter demand. The retrenchment in new development is setting the stage for a more balanced 2026, with absorption expected to reduce vacancy and reignite rent growth in many metros. With institutional capital mobilizing and interest rates easing, the second half of 2025 may mark the beginning of a new multifamily investment cycle—one defined not by the breakneck speed of past years, but by discipline, differentiation, and strategic foresight.

2024 | Multifamily Market Report | Los Angeles, CA

Q4 2024 Los Angeles Multifamily Market Report Los Angeles Key Findings The Los Angeles multifamily higher-tier segment made up the most absorption activity throughout 2024, with renters taking up 7,100 units. The Downtown Los Angeles, Koreatown, and San Gabriel Valley submarkets accounted for the highest absorption levels. With sustained rental activity, Los Angeles has been able to maintain a low vacancy rate since 2023, averaging around 4.9%. It recorded a vacancy rate of 5.0% at the end of 2024. As the metro adjusts to the ULA tax, which is a tax of 4% for transactions over $5 million and 5.5% for sales over $10 million, private buyers have increased their presence in Los Angeles. Private investors accounted for 75% of sales in 2024. By the Numbers 2024 | *represents change from Q3 2024 | Source: CoStar Group Sales Volume: $5.8B ↑ Average Sale Price per Unit: $356K = Cap Rate: 4.9% = Vacancy Rate: 5.0% = Rent Growth: 0.9% ↑ Average Market Asking Rent per Unit: $2.3K ↓ Units Under Construction: 21K ↓ Unit Delivered: 2.2K ↓ Units Absorbed: 2K ↓ Los Angeles Demographics Unemployment Rate: 5.9% Current Population: 9,682,066 Households: 3,464,002 Median Household Income: $89,138 The Los Angeles metro’s population declined by 3.3% over the past ﬁve years. Its slowdown can be attributed to residents leaving because of the high cost of living. However, Los Angeles still boasts a variety of employment opportunities in the entertainment, tourism, and ﬁnancial activity segments. The metro is also beginning to see a recovery in its tourism levels, but international tourism has yet to meet its historical activity. Market Performance The multifamily segment in Los Angeles recorded stable performance in 2024, due to supply and demand remaining in balance since 2022. As rental activity cooled down with residents leaving the metro, rent growth remained around 1.0% year-over-year. Submarkets in South Los Angeles and the North San Fernando Valley recorded the most rent growth at 2.3% year-over-year. Despite sustained rental activity, the wildﬁres from early January resulted in the loss of around 7,000 units in the Paciﬁc Palisades and Altadena submarkets. Single-family homes were also destroyed as a result. With many homeowners and renters recovering from the natural disaster, rent is likely to increase throughout 2025. Current forecasts predict rent to increase by 8%-12% due to the destruction. Construction Throughout 2024, apartments in Los Angeles saw an increase of 8,600 units. Developers have begun setting their sights on Downtown Los Angeles, Koreatown, and Hollywood as these areas record high population growth. Koreatown, speciﬁcally, saw the greatest increase with its inventory increasing by 1,700 new units during 2024. Sales Velocity Sales declined to $1.9 billion in Q4 2024, due to the recent ULA property tax in Los Angeles and higher debt costs. Transaction activity was strongest in the metro’s northern submarkets, where rent is historically lower than other areas.

2024 | Multifamily Market Report | Van Nuys, CA

Van Nuys Multifamily Market Report Key Highlights to Know About Van Nuys Multifamily Rents are 20% below the Greater LA average, with a 1.1% annual increase outpacing the market-wide 0.8% gain. Average rents $1,791/month. The submarket expanded its inventory by 5%, with 924 units under construction, including a 208-unit projects at 6569-6581 N Van Nuys Blvd, the largest delivery since 2016. Sales totaled $72.1 million in 2024, with Q4 sales recording $41.2 million. These are both below historical averages, but improvement is anticipated in 2025. Construction With approximately 1,700 net new units added over the past decade, apartment inventory has expanded about 7%. This growth lags behind the Greater Los Angeles market wide expansion of around 10% during the same period. The largest current development includes a 208-unit project at 6569-6581 N Van Nuys Blvd., is anticipated to deliver soon and is the largest addition to the submarket since 2016. Once completed, this development and other smaller projects in the pipeline will increase the area’s inventory by 1.3%. Although Van Nuys’ construction pace is slower than the broader L.A. metro, it has outpaced other San Fernando Valley submarkets on a percentage basis, except for Woodland Hills, North Hollywood, and Studio City. Vacancy & Rent Van Nuys has maintained a relatively low vacancy rate of 3.3%, slightly improved from 3.5% a year ago. Rents have grown by 0.9% over the past year, with the average asking rent at $1,830/month, about 20% below the Greater Los Angeles average. Class C properties, which dominate the submarket, have a vacancy rate of 2.6%, significantly below the market-wide average of 4.2%. However, the upcoming completion of the 208-unit Class A project is expected to increase vacancy, particularly in the Class A segment. Despite these shifts, Van Nuys remains a relatively affordable and tight rental market, appealing to budget-conscious renters. Sales Transaction volume has been modest over the past year, with $72.1 million in properties trading hands, including $41.2 million in sales during the fourth quarter. Higher interest rates have dampened asset pricing, with average unit prices falling over 15% since their early 2022 peak to $186,000/unit. Recent notable transactions include a 30-unit property at 3606 Cedros Ave., purchased for $7.11 million at a 3.6% in-place cap rates, and Casa Madrid Apartments, a 25-unit property acquired for $4.8 million at a 5.3% cap rate. The market has seen an increase in cap rates, up over 100 basis points. Despite these challenges, buyer interest remains in value-driven opportunities within the submarket.

Daniel Withers

Executive Vice President & Senior Director

1/31/25

The QSR Market | California Spotlight

California’s Fast-Food Legacy & Retail Real Estate Boom: An In-Depth Market Analysis for 2024 QSR Overview What do the classic BigMac, Orange Chicken, and CrunchWrap Supreme all have in common? They originated in California. Surprisingly, the health-focused state was the birthplace of most fast-food restaurants, particularly Los Angeles. The greater LA area is home to In-N-Out, Taco Bell, Panda Express, Hot Dog on a Stick, Wienerschnitzel, and more. Further afield, San Bernardino birthed McDonald’s, Jack-in-the-Box started in San Diego, and Del Taco in Yermo. California is a prime destination for lucrative net lease investments due to its expansive size, robust demographics, substantial consumer spending, and thriving economy valued at $3.1 trillion. The state boasts over 37,000 quick service restaurants (QSRs), providing employment opportunities for a substantial workforce of 384,890 individuals. Retail real estate in California is performing exceptionally well, with availability rates at record lows and retailers competing for quality space in centers that continue to draw traffic post-pandemic. Some chains have reported record-setting years and have committed to opening restaurant locations in new markets. For instance, Carl’s Jr recently entered the Florida market with its first location in South Florida. Jack-in-the-Box completed a record setting year in 2023, signing 123 new restaurant commitments across multiple new markets, and Del Taco signed 138 new commitments. Recently, Del Taco dethroned Chick-fil-A as American’s best fast-food chain for 2024, with KFC placing second, and Chick-fil-A third, according to 10 Best Readers’ Choice Awards. Despite these successes, the QSR industry’s growth in California has faced challenges. Known for convenience and quick order fulfillment, drive-thrus have been a pivotal distribution method, especially in 2020 when indoor dining was limited. However, cities like Santa Clarita imposed a 45-day moratorium on drive-thru development due to traffic and pedestrian concerns. Similar debates are ongoing in Pasadena and Sacramento, where residents and councils debate the impact of drive-thrus on neighborhood walkability. In addition to development challenges, California’s QSRs face potential wage hikes, with efforts to increase the pay floor for fast-food workers in July 2024. Earlier in 2024, a 3.5% hike raised the fast-food minimum wage to $20 per hour, established under AB 257, the Fast Recovery Act. As wages increase and economic uncertainties persist, chains are adjusting by hiking prices and introducing promotions to retain customers. Industry leaders predict these shifts may lead to closures among less competitive restaurants while top performers strive to maintain market share. This report highlights three key markets— Sacramento, Los Angeles, and San Diego—reviewing retail performance and top QSR statistics. Retail Market Performance – Sacramento The Sacramento retail market has demonstrated robust performance over the past year, bolstered by steady demand despite challenges in space availability. Positive net absorption of 300,000 square feet reflects sustained interest from discount retailers, grocers, and experiential businesses buoyed by a population influx from the Bay Area. However, co-tenancy restrictions and a preference for suburban locations by retailers have constrained leasing options, particularly for outparcel space and big-box space. The market’s overall availability rate has contracted to 6.6%, nearing historical lows, with suburban areas like Elk Grove and Roseville seeing rates drop to 6.3%, driven by demographic shifts and income levels. Meanwhile, average asking rents have remained stable at $23.00/SF annually, influenced by limited construction activity and high availability compared to national averages. Construction in Sacramento has been minimal over the past five years, with just 290,000 square feet currently underway, mainly build-to-suit projects. Despite these efforts, construction remains concentrated in suburban submarkets, reflecting retailers’ strategic preference for affluent areas. This limited supply outlook has implications for rent growth, expected to remain modest throughout 2024 as available spaces dwindle. Sales volume in the past year reached $558 million from 270 transactions, this is down significantly from previous highs but marked by strategic acquisitions, particularly in grocer-anchored centers, demonstrating investor confidence in targeted retail segments despite the broader market challenges. Retail Market Performance – Los Angeles While Los Angeles retail rents remain among the highest nationally, the market has experienced a 0.2% decrease in rent over the past year. Despite challenges in the current market economy, neighborhood centers show promise, with rent growth outpacing the market average at 0.7%. These centers are benefitting from post-pandemic shopping behavior shifts, particularly in suburban submarkets like Mid-Cities and Antelope Valley. The construction pipeline remains relatively low, with only 1.4 million square feet under construction, representing a small fraction of the metro’s existing retail inventory. This square footage is represented largely in two projects: Los Angeles Premium Outlets in Carson and the redevelopment of West Harbor in San Pedro’s Ports O’Call Village. The largest recent major shopping center delivery was the retail portion of the Hollywood Park mixed-use development, adding around 300,000 SF of retail space in Inglewood. In the past decade, inventory growth has been modest due to the amount of square feet demolished during this time—Developers built 15.1 million square feet but demolished 10.9 million square feet. The vacancy rate stands at 5.5%. Transaction activity in the Los Angeles retail market has cooled as investors adapt to higher interest rates, with sales volume reaching $2.8B in the past 12 months. Despite this, STNL properties continue to attract high prices in suburban markets. Some upscale submarkets like Beverly hills and century city have seen lower price appreciation. Market prices have grown annually by 3.2% over the past five years, with submarkets like the San Fernando Valley and Antelope Valley experiencing the strongest demand due to their concentration of neighborhood centers. Retail Market Performance – San Diego San Diego’s retail market is experiencing one of its strongest periods in recent years, marked by a notable decrease in availability rates, reaching a near 15-year low at the end of Q2 2024. This trend has been consistent across various retail subtypes, underscoring robust leasing activity despite challenges. Small-box spaces, particularly those under 3,000 square feet, continue to drive leasing volumes. Notably, high-demand areas have seen availability rates under 2%, particularly for service-related and food-and-beverage businesses, which together accounted for nearly 45% of leasing volume over the past year. This reflects a strong demand for smaller spaces, mirroring the availability rates in single-tenant buildings. In terms of construction, San Diego’s retail pipeline shows approximately 540,000 square feet under development, representing 0.4% of existing inventory. However, new inventory is unlikely to meet the demand for well-located brick-and-mortar spaces, as redevelopment efforts increasingly target mixed-use or residential projects due to rent levels not justifying retail costs. Notable redevelopment includes former retail sites like Sears in Chula Vista and Dixieline Lumer in Kearny Mesa, highlighting a shift towards adaptive reuse and mixed-use developments to optimize site potential. Regarding rents, San Deigo has seen a 3.6% year-over-year increase, slightly below the mid-2023 peak growth of 5.1%. This growth continues to outpace the long-term average, driven by a tight retail environment with minimal supply-side pressure. Landlords maintain strong pricing power despite rising operating and labor costs, offering limited concessions such as one or two months of free rent and minimal built-out allowance, particularly for second-generation spaces. Looking ahead, rent growth is expected to remain robust, exceeding historical benchmarks in the coming quarters despite economic uncertainties and elevated interest rates.

Retail Market Report | Los Angeles, CA

Los Angeles Retail Market Report Market Overview The Los Angeles economy is diverse, with significant contributions from entertainment, tourism, international trade, fashion, and aerospace industries. The market’s creative workforce and entrepreneurial spirit contribute to high levels of business formation and self-employment. Sectors like transportation have seen growth, particularly in warehousing, driven by increased demands from retailers and e-commerce operations. This is largely facilitated by the bustling ports of Los Angeles and Long Beach, which handle a massive volume of containers annually. While availability rates have fluctuated, neighborhood centers are benefiting from post-pandemic shopping behavior shifts, particularly in suburban submarkets like Mid-Cities and Antelope Valley. Market Performance Los Angeles rents remain among the highest nationally, with a 0.1% increase in market rent over the past year and 2.2% annually over five years. Despite challenges, neighborhood centers show promise, with rent growth outpacing the market average. The construction pipeline remains relatively low, with only 1.7 million square feet under construction, representing a small fraction of the metro’s existing retail inventory. Vacancy rate stands at 5.4%. Transaction activity in the Los Angeles retail market is cooling off as investors adapt to higher interest rates, with sales volume reaching only $3.3 billion in 2023. Single-tenant net-leased properties continue to attract high prices, exemplified by the sale of a Trader Joe’s store in Agoura Hills for $13.6 million in December 2023. While some upscale submarkets like Beverly Hills and Century City have seen lower price appreciation, overall rent growth remains positive, likely contributing to higher net operating income. Market prices have grown annually by 3.2% over the past five years, with submarkets like the San Fernando Valley and Antelope Valley experiencing the strongest demand due to their concentration of neighborhood centers. To read a previous Los Angeles Retail Market Report, click here.

Q1 Multifamily Market Report | San Fernando Valley, CA

Q1 San Fernando Valley Multifamily Market Report North San Fernando Valley Submarket Overview San Fernando, Granada Hills, Lake View Terrace North San Fernando Valley has experienced steady demand for rental units, positioning it as one of the more competitive submarkets in the L.A. metro. Rent prices have remained relatively stable over the past year, slightly below the metro-wide average. In terms of sales, the submarket saw modest apartment transaction volumes last year. Challenges such as rising debt costs and the implementation of new transfer taxes in Los Angeles have impacted pricing dynamics in the area, leading to a decrease in average unit prices compared to previous years. North San Fernando Valley Submarket Performance Demand for rental units has remained consistent, with 55 units absorbed over the past year, contributing to a vacancy rate of 2.3%, which is below the long-term average of 3.3%. Despite stable rent prices averaging $2,070 per month, the submarket has experienced significant rent growth over the past decade, with an average annual growth rate of 3.9%. Additionally, the past three years have seen the addition of 55 net new units, including Olive Tree Gardens, a 43-unit community in Sylmar. Recent multifamily sales totaled $124 million, the highest dollar volume ever recorded in the submarket. Rising debt costs for multifamily purchases have impacted pricing dynamics, resulting in a decline in the average price per unit by approximately 15% from its peak in early 2022. Despite the higher then normal interest rates, there were notable transactions such as the sale of Summerset Village, a 280-unit community in Chatsworth, exemplify the evolving market conditions and pricing trends within the submarket. The 12-month sales volume stands at $152 million, with the average market price per unit currently at $390,000. North San Fernando By The Numbers | Last 12 Months | Source: CoStar Group Vacancy Rate: 2.3% Rent Growth: 0.3% Delivered Units: 41 Absorbed Units: 55 Sales Volume: $121M West San Fernando Valley Submarket Overview Chatsworth, West Hills, Canoga Park, Winnetka The West San Fernando Valley multifamily submarket presents an array of residential options across neighborhoods like Encino, Tarzana, Woodland Hills, and Canoga Park. With its convenient access to major transportation routes like the Ventura (101) Freeway and the Ronald Reagan (126) Freeway, as well as an abundance of amenities such as shopping centers, dining options, and recreational facilities, the submarket maintains its appeal as a desirable residential destination. West San Fernando Valley Submarket Performance In recent periods, the West San Fernando Valley submarket has observed reduced renter activity, with a net absorption of -52 units over the past year. Despite this, vacancy has increased to 3.1%. The submarket continues to be one of the tightest in the region. Rent prices have risen by 2.3% annually, with average rents standing at $1,970 per month. Currently, the only multifamily development under construction is phase two of 24 by Uncommon, part of the redevelopment of Chatsworth’s former L.A. Times printing plant into a mixed-use campus. In the past year, the West San Fernando Valley submarket saw transactions involving three buildings totaling $7.7 million. This activity is attributed to higher financing costs impacting investor behavior and asset pricing. The average market price per unit has decreased by 15-20% from its peak in Q1 2022, with average market cap rates increasing by 75-100 basis points. Recent notable transactions include the purchase of an 11-unit property in Canoga Park, a 22-unit property in Winnetka, and a four-unit building, all reflecting varying cap rates and market conditions within the submarket. West San Fernando Valley By The Numbers | Last 12 Months | Source: CoStar Group Vacancy Rate: 3.1% Rent Growth: 2.3% Delivered Units: 0 Absorbed Units: -52 Sales Volume: $7.8M To view the remaining markets, download the full report today.

Daniel Withers

Executive Vice President & Senior Director

5/15/24

Multifamily Market Report | Van Nuys, CA

Van Nuys, CA Multifamily Submarket Report Submarket Overview Van Nuys is a neighborhood in the central San Fernando Valley region of Los Angeles and is the most populous neighborhood in the San Fernando Valley. The submarket is known for its aviation legacy and has grown into a bustling urban community. The Van Nuys multifamily submarkets continue to experience reduced tenant demand. Submarket Performance In the last 12 months, there was a net absorption of 27 units in the Van Nuys submarket. Rents have shown modest growth in the recent quarters, with a 1.2% increase over the past year. The vacancy rate in Van Nuys in Q1 2024 has risen to 3.3%, up from 2.9% one year ago. The average asking rent in Van Nuys is $1,770 per month, which is a 20% discount compared to the Greater Los Angeles market averages. The submarket is known for providing some of the more affordable housing options in the Los Angeles metro area. Over the past decade, Van Nuys has experienced moderate construction. This shows more activity than most areas in the San Fernando Valley. Currently, there are 310 units under construction, accounting for 1.3% of the existing units in the area. 375 units have been proposed over the next eight quarters. In Q4 2023, property transactions amounted to $12.4 million, a decrease compared to the quarterly average of $39.3 million over the past 10 years. The increase in debt costs has impacted sales activity, and recent transactions indicate softer pricing than what would likely have been achieved in early 2022. The average market price per unit, currently at $270,000, has decreased by approximately 15% from its peak of around $320,000 per unit in Q1 2022. Van Nuys By The Numbers | Last 12 Months | Source: CoStar Group Vacancy Rate: 3.3% Absorbed Units: 27 Rent Growth: 1.3% Sales Volume: $69M Delivered Units: 155

Daniel Withers

Executive Vice President & Senior Director

3/28/24

Multifamily Market Report | Sun Valley, CA

Sun Valley Multifamily Market Report Market Overview Sun Valley is a neighborhood located in the San Fernando Valley region of Los Angeles, California. It is situated in the northeastern part of the city and is known for its diverse population, suburban feel, and proximity to various attractions and amenities. Highlights The market cap rate is fairly similar to the Los Angeles metro average of 4.5%, sitting at 4.6%. The total population of Sun Valley is 55,280, seeing a .3% increase from the same period in 2022. The market pricing sits at $274,736 as of Q3 2023. Rents | Vacancy | Construction The Sun Valley submarket has maintained the same vacancy rate in the past year, staying at 2.2%. There has been a modest amount of positive absorption. Class C units are currently the most popular, with 5,824 total units. There are a total of 2,556 Class B and 243 Class A units. Rent has increased 2.4% from last year, currently at around $1,670 per month. Rents have increased a cumulative 10.1% in the past three years. There are currently 56 units under construction. Sales Annual sales volume has averaged $31.1 million over the past five years, and the 12-month high in investment volume hit $56.6 million over that stretch. Buyers have shown interest in Sun Valley’s multifamily properties and have scooped up assets over the years. In the past 12 months, $16.3 million worth of assets have been sold in Sun Valley. Although investors have historically been active, over the past 12 months, deal flow has pulled back. Sun Valley by the Numbers Last 12 Months Vacancy Rate: 2.2% Asking Rent Growth: 2.4% Average Price Per Unit: $300,000 Sales Volume: $16.8M Sale Comparables: 4 Units Under Construction: 56

Multifamily Market Report | Los Angeles, CA

Los Angeles, CA Multifamily Market Report Market Overview Los Angeles has a diverse and vast economy, with significant contributions from the entertainment, tourism, international trade, fashion, and aerospace industries. However, the market experienced softer conditions in Q2 2023. The demand for apartments has been modest, resulting in low net absorption and an increase in vacancy rates. Rent growth has stalled, and landlords are offering concessions to attract renters. Construction activity remains high, with a significant number of units under construction, particularly in Downtown Los Angeles and Koreatown. Transaction activity in the market has been impacted by higher debt costs and tighter lending standards, leading to fewer properties being traded compared to previous years. Overall, the Los Angeles market is facing challenges with limited demand, increased supply in the face of economic uncertainty and inflation. Highlights The Los Angeles multifamily market saw sales of $7.5B within the past 12 months. Average rent levels in the region have reached $2,226 per month. Average price per unit year-over-year is currently $344K. The tighter submarkets, particularly in the San Fernando Valley, have lower vacancy rates and more affordable rental prices, while more expensive submarkets like Downtown Los Angeles and Santa Monica have higher vacancy rates. Rents | Vacancy | Construction Approximately 95% of the net units added in the past decade were in higher-end 4- and 5-Star communities, and the current construction pipeline is also predominantly focused n 4- and 5-Star projects. Los Angeles apartment rent growth has slowed down compared to previous years, with year-over-year gains of 0.8 percent as of Q2 2023. The increase in apartment availabilities has led property managers to offer more concessions, with 23 percent of properties providing concessions in June, one of the highest levels since early 2021. Additionally, vacancy rates have increased from a two-decade low of 3.8 percent in Q1 2022 to 4.9 percent. In the past 12 months, Los Angeles has delivered 11,588 new units, representing a growth of just over one percent in apartment inventory. Moreover, there are currently 23,641 units under construction, which comprises 2.3 percent of the existing inventory. While development levels in Los Angeles are below the national average of 5.6 percent, restrained construction activity is expected to result in more modest increases in vacancy compared to many other markets. Sales The 12-month sales volume for Los Angeles is $7.5 billion, higher than the historical average of $6.6 billion for multifamily assets. Further, the average transaction prices in the Los Angeles market have declined from a peak in Q2 2022, dropping from over $380,000 per unit to $344,000 per unit in Q2 2023. Some sellers are still holding out for the higher prices seen in early 2022, while buyers are anticipating a 10 to 20 percent discount compared to early 2022 pricing, due to the rise in debt costs. The recent implementation of additional transfer taxes has also put downward pressure on transaction volumes and asset values. Los Angeles by the numbers last 12 months Units Under Construction: 23,641 Units Delivered: 11,588 Vacancy Change (YOY): 1% Average Asking Rent: $2,226 Average Price/Unit: $344K Sales Volume: $7.5B

Q1 2021 Multifamily Market Report | San Fernando Valley, CA

Southern California’s San Fernando Valley is an urbanized valley in Los Angeles County. It encompasses about 80 percent of the City of Los Angeles and includes other independent cities, including Burbank, Calabasas, Glendale, Hidden Hills, and San Fernando. Comprised of nearly 350 square miles of prime real estate, the San Fernando Valley is home to more than 1.8 million residents. This not only makes the Valley a great place to live but is also an attractive location for business. In addition to the many famous movie studios, historical sites, theaters, and museums, the San Fernando Valley offers an incredible array of fine dining, shopping, lodging, and recreational activities. In this issue of our report, we touch on the following topics: San Fernando Valley overview, population trends, and economic demographics Overall pricing metrics for each product type New multifamily developments Detailed breakdown segmenting each area within the San Fernando Valley and the key indicators within that pocket

Daniel Withers

Executive Vice President & Senior Director

5/4/21

A Quick Look at Jersey Mike’s Subs

Jersey Mike’s Subs was founded in 1956 and currently has 1,842 locations in 48 states and the District of Columbia. The brand focuses on serving an authentic sub sandwich, served Mike’s Way with onions, lettuce, tomatoes, olive oil blend, red wine vinegar, and spices. The company is committed to providing its customers with quality, freshness, and authenticity, which has helped the brand win Best Sub and Best Sandwich Awards in almost every market. Jersey Mike’s Subs Update Jersey Mike’s Subs has weathered the pandemic better than most through strong financials, efficient store operations, and dedicated company culture. During 2020 and through the height of the pandemic, the company’s year-over-year sales growth was flat, compared with many other brands that were down by double-digit percentages. This is because the brand was already highly focused on digital orders, and brand recognition and high-quality products kept customers returning. Further, the brand committed to serving communities in need by donating millions of free sandwiches during the crisis. This not only heightened brand recognition but enhanced connections between the company and its customers. Jersey Mike’s was quick to pivot and comply with CDC guidelines. Although the brand is mainly a take-out business due to the limited seating and the average unit space being 1,200 to 1,400 square feet, the brand set-up safe zones with tables in front of the counters to allow adequate space between employee and customer as well as signage. According to Founder and CEO Peter Cancro, the company relies on technology. “We have tremendous POS and digital opportunities set up,” said Cancro. He reported 25 percent of sales were order online and pick-up in store, ten percent mobile orders, and 15 percent third-party orders. Roughly 50 percent of sales come from take-out, curbside, or third-party, therefore, Jersey Mike’s saw minuscule decline when taking away indoor dining. The company has about 475 owner-operators, with a broad range of mom-and-pop owners and multi-unit operators. By doing the math, each owner-operator has a handful of stores. Recently, Jersey Mike’s Subs announced a $150 million investment in retrofits, despite the coronavirus pandemic hitting the industry. The previous retrofits occurred in 2009, 2010, and 2011. This refreshed look will boast new tables and chairs, back-line tile, counters, overall flow, and wall graphics. It will cost about $75,000 per unit, and the inside of the locations will be brand-new. Unique to the industry, Jersey Mike’s Subs will front the cost of most retrofit expenses. Along with the retrofit, Jersey Mike’s Subs will add a back-line counter, new templates, a new register, and a new customer-facing terminal. The back-line counter will be a separate pick-up station for those who order online or through third-party delivery, and back-line staff will be dedicated to making these orders. All retrofits are scheduled to be completed by July 2021. Jersey Mike’s Subs is expected to have a new, refreshed look nationwide, which will help the brand and Jersey Mike’s Subs locations stay relevant. JERSEY MIKE’S IS STILL GROWING AND LOOKING FOR SITES IN SOUTHERN CALIFORNIA! SANTA MONICA • VENICE • CULVER CITY • WEST LOS ANGELES • KOREATOWN • GLENDALE • ATWATER VILLAGE • ALTADENA • EAST PASADENA • AZUSA • WEST COVINA • SANTA CLARITA/VALENCIA • SAN FERNANDO VALLEY

Aditya Ramnath

Vice President & Associate Director

12/29/20

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The QSR Market | California Spotlight

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Multifamily Market Report | Los Angeles, CA

Q1 2021 Multifamily Market Report | San Fernando Valley, CA

A Quick Look at Jersey Mike’s Subs

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