Marcus & Millichap closes 41-unit North Hollywood apartments at $143,610 a unit, 5.7% cap

Marcus & Millichap has closed the sale of The Kwan Trust's 41-unit building at 13103 Barbara Ann St. in North Hollywood, held for more than 30 years, for nearly $5.89 million, or $143,610 a unit, at a 5.7% cap rate based on in-place income. Rick Raymundo, an executive managing director in the brokerage's Encino office, marketed the building for the seller and procured the buyer, a San Fernando Valley limited liability company.

That three-decade hold is the underwriting starting point: at a $5.89 million price, the 5.7% cap implies roughly $336,000 of in-place net operating income, about $8,200 a unit, so the buyer's return depends on moving rents rather than collecting the current ones. The purchaser says it plans common-area and interior upgrades throughout the building, and Raymundo called the long single ownership an unusual chance to buy a building of that size with significant repositioning potential, adding that buyers are bidding more confidently on well-priced properties when sellers are committed to closing as recent pricing volatility eases.

The unit price places the trade in capital-markets context, and this publication's records show IPA brokered a 260-unit North Phoenix apartment sale in late September at $225,769 a unit with no cap rate disclosed, a 2024-vintage asset in a different market and therefore no like-for-like read, while in the same stretch Marcus & Millichap announced a 206-unit Fort Wayne sale out of a 50-year family hold, also without a price. Long-held, under-improved product is moving; the numbers just aren't always attached.

Under that cap rate, the spread is where the deal gets thin, since a Marcus & Millichap research note on industrial cost pressure this week put the 10-year Treasury above 5%, leaving this buyer clearing under 70 basis points of unlevered yield over the risk-free rate. That gap does not pay for the new kitchens by itself, and the renovation plan is the trade, not an option on it. It also lines up with what recent apartment trades have shown: the income half is clearing on rent growth, and a value-add on a 30-year-old rent roll in the Valley is a rent story with a construction schedule attached.

The two numbers in one press release are more disclosure than most small apartment trades produce, and the per-unit figure reconciles cleanly: 41 times $143,610 is $5,888,010, a rounding difference from the nearly $5.89 million headline. What the buyer paid is now public; what it collects after the work is the next data point, and until a comparable North Hollywood trade closes with a cap rate attached, the 5.7% is the only marker.