Santa Monica Multifamily Market Report
Market Overview
- During the past five years, Santa Monica saw an average annual growth of 1.9%, compared to 2.8% in the Greater L.A. apartment market.
- Nearly 70% of Santa Monica residents rent, while the Greater L.A. metro is evenly split between renters and homeowners.
- Average cap rates of 3.5% in the submarket are among the lowest seen in the L.A. apartment market as well as the nation.
- There are currently 650 units underway, representing 2.5% of existing inventory.
- Class A properties comprise around 15% of units, and these communities are clustered in the Downtown area between Santa Monica Boulevard and Colorado Avenue.
Rents/Vacancy/Construction
Santa Monica has long been one of Southern California’s most desirable residential, retail, and employment destinations.
The submarket’s median annual household income is well above the L.A. average of $73,000 per year, and average apartment asking rents are up by 2.2 percent during the past 12 months. With average asking rates of $3,300 per month, Santa Monica’s rents are among the highest in the L.A. metro.
In regard to construction activity, the largest project underway, NMS Lincoln at 1550 Lincoln Blvd., will comprise 100 units and will deliver in the near term.
Market Rent
90291 — $2,382
90404 — $2,507
90408 — $2,509
90401 — $12,159
90405 — $3,515
90402 — $5,526
90403 — $3,546
Sales
Multifamily sales activity during the past year on a dollar basis was $628 million and well above recent historical activity. Given Santa Monica’s coastal location, strong demographics, and compelling area amenities, the average pricing per unit is $680,000, well above the metro average of $420,000. Average cap rates in the submarket are at 3.5 percent presently. Looking at recent notable sales, in April 2022, Douglas Emmett purchased 1221 Ocean Ave. from Irvine Company for $330 million ($2.75 million/unit). The sale represents one of the largest sales in Santa Monica’s history.
Employers
The most common job groups, by number of people living in Santa Monica, CA, are Management Occupations (9,300 people), Business & Financial Operations Occupations (5,820 people), and Arts, Design, Entertainment, Sports, & Media Occupations (5,248 people).
Education
Santa Monica-Malibu Unified School District contains 17 schools and 9,929 students.
Where/How is the City Investing Tax Dollars?
- The Miramar Santa Monica — The Santa Monica City Council approved plans to redevelop The Miramar Santa Monica hotel, including 312 hotel rooms, 60 condos, retail space, and a spa. The project will provide 42 affordable apartments and public garden terraces. The California Coastal Commission has approved the project and will move to City design review in early 2023.
- Ocean Avenue Project — The Santa Monica City Council approved a mixed-use project designed by Frank Gehry, including a hotel, commercial space, 100 residential units, a museum, a public rooftop observation deck, and pedestrian walkways. The project is LEED Platinum-certified.
- 710 Broadway — Related California plans to redevelop the Vons grocery store site on the southwest corner of Broadway and Lincoln Blvd. The mixed-use building will include 280 multi-family homes, 84 of which will be affordable residences. The ground floor commercial space will house an upgraded Vons grocery store, gym, and restaurant space. The project will also include 354 parking spaces. The project aims to address traffic congestion and benefit downtown Santa Monica. It is expected to break ground in early 2023 and be completed in early 2026.
- 516 Colorado Avenue — A 74-room hotel is being planned for 516 Colorado Ave, and a formal application has been submitted. Howard Laks Architects designed the project, including a small outdoor dining area on the ground floor facing Colorado Avenue and the Metro E Line. Other features include a rooftop bar, restaurant, fitness center, business center, and banquet room. The project is expected to undergo a Planning Commission review in December 2022.
