Hollywood’s multifamily market in Q3 2025 reflects a cooling yet stabilizing environment, with vacancy at 6.7%, one of the higher rates in Greater Los Angeles and renter demand of 300 units over the past year, well below historical norms. Construction has slowed substantially from its 2018 peak of more than 3,000 units underway to just 336 units today, a modest 0.6% planned expansion. Pricing continues to reset, with the average of $348,000/unit sitting roughly 20% below 2022 highs. Even so, transaction activity remained solid, totaling $587 million over the past 12 months. Elevated financing costs and Los Angeles’ 2023 transfer tax continue to weigh on valuations, but moderating development and steady investment interest suggest the market is moving toward a more balanced, sustainable footing.

 

Key Findings

• Hollywood’s vacancy rate sits at 6.7%, near its long-term average, as renter demand of 310 units remains well below the submarket’s historical pace. Deliveries of 84 new units helped keep fundamentals stable despite muted absorption.
• Rent Growth Stalls Amid High-End Competition: Rent performance was essentially f lat, with year-over-year asking rents dipping 0.1%, trailing the metro. A decade of heavy top-tier development has increased competition, suppressing long-term rent growth.
• Construction Cools as Values Reset: Construction activity has moderated, with just 336 units underway. Investment volume reached $742M over the past year, though property values remain about 20% below their 2022 peak due to elevated debt costs and transfer taxes.

 

Hollywood Sales

Hollywood recorded $587 million in multifamily sales over the past 12 months, well above its long-term annual average of $442 million, with $251 million closing in Q3 alone. Despite this elevated activity, pricing remains well below peak levels as higher debt costs and Los Angeles’ 2023 transfer taxes weighed on values. After declines that began in late 2022, pricing appears to have stabilized in the back half of 2024, with the average market price down roughly 20% from its 2022 high to $380,000/unit. Notable recent trades include Grubb Properties and PCCP’s $98.4 million acquisition of The Fifty Five Fifty, purchased at a significant discount to its 2018 sale price, and Friedkin Property Group’s $52.15 million purchase of La Belle Hollywood Tower, also at a loss to the seller’s prior basis.

 

Sales Volume & Price Per Unit

Source: CoStar Group, Inc.

 

 Hollywood Construction

Hollywood’s development pipeline remains active but far more modest than in prior years, with 280 units underway, an increase of just 0.6% once delivered. This follows a decade of exceptional construction, during which the submarket added 7,200 new market-rate units and expanded inventory by nearly 20%, far outpacing the metro’s 10% growth. Most of this surge came from Class A projects, more than doubling Hollywood’s luxury stock and elevating the area’s profile alongside new office and hotel development. Over the past year, about 310 units delivered, including major projects like Modera Argyle and Faring’s Rae on Sunset.

 

Under Construction (SF)

Source: CoStar Group, Inc.

 

By the Numbers

Q3 2025 | Source: CoStar Group, Inc.

• Sales Volume: $251M
• Average Sale Price Per Unit: $348K
• Cap Rate: 5.0%
• Vacancy Rate: 6.7%
• Rent Growth: 0.6%
• Average Market Asking Rent Per Unit: $2,420
• Units Under Construction: 336
• Units Delivered: 84
• Units Absorbed: 57