Multifamily assets remained king for real estate investment in Los Angeles closing out 2025 and heading into the new year.
New data from Avison Young showed that investment growth in 2025 was largely positive across asset types year-over-year for both dollar volume and the total number of deals – aside from industrial which was more of a mixed bag.
In 2025, land sales more than tripled – soaring by nearly 157% in Los Angeles County, Avison Young data showed. At the same time, the number of deals inched higher by 3% last year.
“That means these are larger, more significant sites that are trading,” said James Nelson, principal and head of U.S. investment sales at Avison Young. “That being said, it’s only a half a billion dollars in sales across 34 land sales, so we don’t want to overstate the significance of it.”
Overall, L.A. saw 557 transactions in the multifamily asset type in 2025, totaling $6.5 billion and yielding a 30.8% increase in dollar volume for the year. Erik Edeen, principal and senior director of U.S. investment sales, said owning and operating a multifamily building is lucrative right now, especially in Los Angeles where he said it’s about two-and-a-half times more expensive to own than rent.
“If I’m an investor, I like that from a long-term view on owning rentals as it doesn’t seem that home ownership is going to be getting any cheaper,” Edeen said.
While industrial saw 18.7% more deals close in 2025 than the prior year, its total dollar volume decreased by 7.5%. “The slowdown is rooted in fundamentals and logistics dynamics, not just financing costs,” said Patrick Barnes, a principal at Avison Young who focuses on the industrial and office sectors.
According to Barnes, the major factors impacting industrial transaction volume include rising vacancy and negative or slowing absorption, material rent declines and concessions, tenant downsizing, volatility in the ports and uncertainty caused by tariffs. He also pointed to “supply additions and backfill challenges” as well as “buyer’s wide bid-ask spreads.”
Still, Barnes and Brett Dedeaux, chief executive and managing partner for Dedeaux Properties, see a turnaround on the horizon in 2026. Dedeaux Properties, based in Santa Monica, owns and operates more than 14 million square feet of industrial real estate in California.
“We believe 2026 will mark a transition from reset to recovery – not a return to speculative excess, but a more rational, user-driven market,” Dedeaux said. “The winners will be properties that solve real operational problems and owners who can move decisively when opportunities arise.”
One promising signal Barnes identified is that industrial vacancy in L.A. is seeing a deceleration in its rate of increase. Additionally, its net absorption from the first quarter in 2025 through the third quarter was positive for the first time since 2022, Barnes said. “This indicates the market is gradually finding equilibrium,” he added, while emphasizing that “the recovery will be uneven and submarket specific.”
Industrial inventory in infill areas will recover more quickly as well as areas close to ports such as the South Bay, he said.
As far as the office market goes, bold sweeping statements about performance are tricky given how differently submarkets can perform, said Jay Maddox, a principal in Avison Young’s capital markets group. The firm’s data, which reports the price per square foot range for the middle 40% of transactions across each asset type, exemplifies this sentiment. Office has the widest range at $280 to $600 per square foot, indicating sale prices were quite diverse. To compare, multifamily had a much smaller range at $270 to $380 per square foot.
“With respect to the trades in the L.A. office market, clearly it’s been through a massive basis reset,” Maddox said, noting that many class A office buildings in downtown went back to lenders. “We’ve seen a lot of trades at $250 per square foot or even lower.”
For example, the downtown tower at 601 S. Figueroa St. sold in June for $202 per square foot. In that same week, the creative office campus i|o at Playa Vista sold for $502 per square foot. It’s worth noting that cap rates for office trades – when looking at the middle 40% of transactions – were lower than Avison Young originally forecasted. At the end of the third quarter, the firm projected 2025 would end in the 7.34% to 9.16% range; but after incorporating transaction data for the fourth quarter, the estimate fell between 6.54% and 8.08%.
Overall, in 2025 Los Angeles’ real estate sales increased 11.1% in deal count and 21.8% in dollar volume from the prior year, Avison Young’s data reported. However, between the third and fourth quarters of last year, transactions decreased by 20.5% in deal count and 25.7% in dollar volume. This is atypical “because the fourth quarter is usually the most active quarter,” Nelson said.
He attributes L.A.’s decrease more to the dollar volume of deals sealed in the third quarter than anything else. The top deal in the third quarter – which was the $400 million sale of 342 N. Rodeo Drive in Beverly Hills – was nearly double the top deal of the fourth quarter, a $211.4 million industrial transaction in Westchester. The second and third largest deals of the third quarter were 112.5% and 79.1% higher than the second and third largest deals of the fourth quarter, respectively.
As far as the buyer market goes, institutional investment increased slightly in the fourth quarter. From the start of 2025 through the third quarter, institutional buyers were behind 20.3% of L.A. deals. Looking at the entire year, this percentage increased to 25.6% after the fourth quarter. Still, Nelson made clear that this does not mean institutional investment into L.A. is completely back.
“It’s still going to take some time to really get this momentum going again and have these institutions jump back in a more meaningful way,” Nelson said, pointing to strong volume with private buyers who were responsible for 62% of transactions. “There’s still a lot of private investors in L.A. who are viewing this as an opportunistic time to buy … The institutions are looking for safety – they’re not going to necessarily be pioneers.”