August was a slow month for multifamily sales, at least on the top end of completed sales.

The five largest multifamily sales of the month totaled $81.3 million, less than a third of the $297 million in July and less than the $118 million total in June.

None of the top sales in August registered above $30 million. The sales only reflect activity at the high end of the market, but could be indicative of a larger slowdown in activity.

Commercial brokers attributed the falloff in sales to higher interest rates and uncertainty over the outcome of a November ballot initiative that would roll back measures that limit rent-control.

Oscar Diaz, an associate at Marcus & Millichap, said he’s seen a general slowing that he pins on uncertainty over the outcome of Proposition 10, which, if passed, would repeal the Costa-Hawkins Rental Housing Act of 1995, opening units across the state to rent caps.

“Our business is cold calling hundreds of owners a week and what we’ve been hearing is they’re just waiting to see where Costa Hawkins will go,” Diaz said. And with higher interest rates, “owners now are concerned about the future market value of their properties.”

Brian Shaffer, a principal and managing director at George Smith Partners, told The Real Deal that sellers have been unwilling to reduce prices, “so we have seen a standoff, which has impacted the multifamily investment sales market.”

The August figures were compiled from property records by PropertyShark.

1. Las Palmas Villa Apartments — Xenon Investment Corp | $28.05M
A West Los Angeles investment company made the biggest purchase of the month when it bought this four-story complex. The property is an 81-unit building close to Route 101 and built in 1984. The sale was made through Hollywood Lofts LLC, represented by Deepak Mehta, the owner of Xenon Investment.

2. 427 N. Palm Drive — Etco Homes | $23.3M
The second largest sale of the month was an all-Beverly Hills deal. Both buyer Ecto Homes and seller K Pacific Development LLC are headquartered there, and the 12-unit property itself is on the eastern edge of the tony city. The two-story building was constructed in 1941. Etco is a developer, so it could have plans to replace the building with something larger in the future.

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