Santa Monica apartment cap rates held steady in 2018, with pricing both per unit and per square foot consistent with numbers in 2017. According to Kimberly R. Stepp of Stepp Commercial, the average cost per unit in Santa Monica was $455,871 and the average price per square foot was $573 in 2017, while the average cost per unit was $458,443 and cost per square foot was $546 in 2018.

“The market remained stable showing tepid growth late in the year,” Stepp, a principal at Stepp Commercial, tells GlobeSt.com. “The pricing indicators and overall sales volume remained consistent with 2017 levels, and cap rates averaged the same for both 2017 and 2018.”

While there was little pricing growth, Santa Monica remains a favored market for investors who can land one of the rarely traded apartment buildings in the market, and Stepp doesn't expect that to change in 2019. What will change? Stepp says that inventory will likely increase this year. “We're optimistic that the Santa Monica market along with prime Westside markets will continue to provide steady long-term growth for investors,” she explains. “We see the volume of inventory increasing in 2019 due to the once imminent threat of Prop 10 no longer being an issue and interest rate fluctuation. The desirable location coupled with a steady influx of tenants willing to pay top dollar throughout the city are key factors that contribute to property pricing remaining robust through 2019.”