Investment appetite is increasing in San Pedro. The Long Beach waterfront market is undergoing a revitalization with increased demand for multifamily that has fueled rent growth—and capital is responding. Berkadia has closed $250 million in deals in the last 10 months, including Harbor Terrace, a 93-unit midrise multifamily property that sold for $20.8 million. "San Pedro is going through a revitalization with the $150 million renovation of the Ports O'Call Village," Jim Fisher, managing director at Berkadia, tells GlobeSt.com. "The area is a great place to live. About 60% of the people that live in San Pedro work in Downtown Los Angeles. It is a straight shot up the 110 freeway. Rents are $500 per unit cheaper than they are in the city, and you live by the beach." The area is also home to strong jobs centers as well. "San Pedro and Long Beach are coastal communities with strong sustainable job bases that are undergoing waterfront renaissances," Mike Smith, managing director of Berkadia, tells GlobeSt.com. "Both communities enjoy great dining destinations, craft breweries, art galleries and other cultural landmarks that attract the modern renter." Most capital in the market is looking for value-add deals, like M West, which purchased the Harbor Terrace property. Most of the product in San Pedro is at lease 10 years old, making it a good play for value-add buyers. "There is not a lot of newer product out there," says Fisher. "The last two assets that we sold were 1980s, class-B or B-plus. The buyer pool out there is really value-add. Everyone is trying to create value." It isn't just the number of deals signaling investor appetite, but the number of offers on available deals as well. According to Fisher and Smith, they have received multiple offers on the last several transactions. "We sold some assets off market, and we had high interest levels," says Fisher. "We are getting multiple tours and multiple offers. Over the last 18 months there have been more activity. That is a market that has been trading quite a bit, and there is plenty of capital to go around for very little product." Like other areas in Southern California, the investor demand has put upward pressure on pricing. "The lack of inventory and strong demand for apartment assets is pushing pricing not just in San Pedro/Long Beach, but throughout Southern California," says Smith. "Aside from just a lack of product, strong submarket rent growth and high occupancy figures are making San Pedro/Long Beach top targets for investors." Activity in the market began picking up 18 months ago, and it seems to have a long runway for growth ahead as the market continues to see revitalization. "San Pedro is going to thrive as landscape-altering renovations continue to take place, including the San Pedro Public Market, Ratkovich's $150 million waterfront redevelopment scheduled to open in 2020," says Smith. "What was once a port community is emerging as a walkable cultural destination with fine dining, gastro pubs, and 30 art galleries. We expect this renaissance will continue to drive housing demand and increase apartment values in the market."