Los Angeles Multi-Family Market Trends

1. Rent Trends and Tiered Pricing

Los Angeles apartment rents continue on a measured upward trajectory in early 2025, inching up by 0.7% over the past year. Although below the national average of 1.1%, the current pace reflects a market contending with outmigration, slower employment gains, and a high cost of living. Despite these challenges, consistent renter demand—especially from higher-income households—has supported rising rents:

• High-End (4 & 5 Star): $3,317/month on average, benefiting from demand among affluent tenants

• Mid-Tier (3 Star): $2,426/month, with moderate growth driven by a broad middle-income renter base

• Lower-Tier (1 & 2 Star): $1,805/month, registering the largest percentage bump of around 0.9% year over year

  
  

2. Typical Unit Sizes in Los AngelesAlongside varying rent points, unit sizes also differ by property type and location. Recent sales data indicate that the market-wide average unit size comes to about 824 square feet, with a median of 789 square feet . While this square footage suits the majority of standard one- and two-bedroom apartments, the range can be significant:

• Smaller Studios or Micro-Units: As low as 45 square feet in unconventional or specialized developments

• Large Units/Penthouses: Up to 3,306 square feet in select luxury properties with multiple bedrooms and high-end amenities

In top-tier (4 & 5 Star) communities, floor plans typically surpass the 850–900 square foot mark, reflecting a focus on more spacious studio, one-bedroom, and two-bedroom layouts. By contrast, older stock at the lower end often settles below 700–750 square feet, appealing to budget-minded tenants and offering more economical rents.

3. Submarket Performance

Many prime, centrally located submarkets—such as Downtown Los Angeles and Koreatown—offer higher-than-average rents (often around $2,800/month or more), larger footprints, and modern amenities. However, new supply and elevated vacancies in these areas have subdued their rent growth. Meanwhile, more affordable submarkets in the San Fernando Valley and South Los Angeles—commonly averaging $1,700–$2,200 in monthly rents—are tight on vacancy, spurring 2–3% year-over-year rent increases. Although many older properties in these districts feature smaller units, their comparatively low rents and limited new construction pipeline keep them in high demand.

4. The Year Ahead

Rents are projected to strengthen by year-end, potentially approaching 2% annual growth. As delivery of new units slows, landlords may gain slightly more pricing power across all property classes. Key factors to watch include the local entertainment and tech sectors returning to pre-slowdown levels, which would boost household formation and—by extension—rental demand.

5. Key Takeaways

• Steady if Subdued Growth: Modest rent increases continue, buoyed by historically tight inventory in many submarkets.

• Tiered Market: Top-tier assets command the highest rents and usually feature bigger unit sizes, while older, budget-friendly housing caters to value-seeking tenants with smaller footprints.

• Balancing Act: Outmigration pressures and higher vacancy in upscale neighborhoods temper price hikes, offset by insufficient supply in more affordable areas.

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All told, the Los Angeles multifamily market remains a study in contrasts: large, upscale units with premium rents meet substantial, albeit smaller, older apartments in lower-cost districts. The city’s high overall housing costs mean that space often comes at a premium—but for owners, relatively low construction levels and diversified renter demand suggest continued slow-but-steady growth in both rents and values in 2025.

By Michal Mohelsky, J.D., principal of MMCG Invest, LLC, multi-family feasibility study consultant