12021 Hoffman St, Studio City

the successful sale of 12021 Hoffman St in Studio City, CA.

How We Priced the Property

Whenever a client asks us to price a smaller rent-controlled apartment building in Los Angeles, we always consider the redevelopment potential of the lot in addition to the value of the existing units. What sets us apart from the competition is our ability to accurately analyze rent-controlled properties as redevelopment opportunities. With extensive experience in land sales—

In most cases, the challenges of redeveloping a rent-controlled property mean it’s more valuable to apartment investors. However, we believed this Hoffman lot had unique potential, particularly for a developer open to building a large ED 1 project with 100% affordable units.

Looking solely at the existing 5-unit building, we would have priced 12021 Hoffman with a 4.75%–5.00% CAP rate, reflecting the current market for rent-controlled apartments in Studio City. This CAP range would have put the value between $1,350,000 and $1,400,000— or about 10% below the price we ultimately achieved for our clients.

We settled on a list price of $1,495,000. While this price seemed high as a pure apartment investment, it kept the land value under $200/sf, which we believed would attract developers—and we were right.

Deal Story

We listed this property in mid-September as part of a three-property portfolio in the San Fernando Valley. Within a week of signing the listing agreement, we opened escrow at full asking price with an all-cash buyer. Originally, the contract called for a 30-day close, but after the buyer removed all contingencies - which he did without asking for any credits - he requested a 30-day extension. In return for the buyer receiving a 30-day extension to escrow, we negotiated that the buyer would authorize escrow to release his deposit directly to the seller’s bank account. While this didn’t cost the buyer anything extra—since the deposit would still apply toward the purchase price—it demonstrated the buyer’s commitment to the deal and made it easier for the seller to agree to the extension. After we settled that extension negotiation, escrow went as smoothly as possible, leading to our successful close of escrow last week, just before Thanksgiving.

Buyer Wants More Deals

This buyer is aggressively searching for similar lots throughout Los Angeles for future redevelopment opportunities.

If you own a smaller rent-controlled...