How your building is actually valued.
A house sells on what the one next door sold for. An apartment building sells on what it earns. Understanding the three numbers buyers use puts you in control of the conversation — and helps you see where a little work before listing can move the price more than any negotiation will.
Gross Rent Multiplier (GRM)
GRM is the sale price divided by the building's annual gross rent — a quick way buyers compare income properties. In Long Beach, smaller 2–4 unit buildings have recently traded around 13–14x gross rent, while larger 5+ unit buildings run lower, roughly 10–12x, because that segment repriced after 2021. A lower GRM means a buyer is paying less per dollar of rent — which is why buildings with below-market rents (real upside) can command attention even at a full price.
Cap Rate
The capitalization rate is net operating income divided by price — the building's unleveraged yield. Long Beach cap rates have recently sat around 5.5%–6.0%, varying by class and condition. Cap rate and price move in opposite directions: as buyers demand higher yields, prices soften, and vice-versa. Cleaning up expenses and documenting real NOI is the single most controllable way to support your value.
Price Per Unit
A sanity-check metric: total price divided by number of units. Long Beach has recently ranged widely — roughly $200K/unit in the more affordable north end up to $475K/unit in premium east-side pockets like Belmont Heights. It's useful for a gut check, but income (GRM and cap) drives the real number, especially at 5+ units.
Where owners leave money on the table
Two places, almost always: below-market rents that were never documented as upside, and messy books that make a buyer nervous. A clean rent roll, a real expense picture, and a clear story about achievable rents routinely matter more to the final price than the listing price itself. That work happens before we go to market — see the marketing plan.
The short version
- 5+ unit buildings sell on income (GRM and cap rate), not on comparable-house logic.
- Documented NOI and a clean rent roll are the most controllable levers on price.
- Below-market rents can be an asset when presented as verifiable upside.
- Price per unit is a sanity check, not the driver.
Keep reading
The marketing plan — written down, before your building ever hits the market
The Dividing LineThe line between 4 units and 5 units changes everything
Defer, Don't Give AwayThe 1031 exchange, in plain English
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