22-Unit Courtyard Apartment
For Sale
$7,650,000
2727 3rd St, Santa Monica, CA 90405
Two-story multifamily property with covered parking, private outdoor areas, and a mix of one- and two-bedroom residences.
Property Size17,020 SF
Days on Market12
Property Features for 2727 3rd St
General Information
Standard status
Active
Size
17,020 SF
Net Rentable
17,020 SF
Total Parking Spaces
22
Property subtype
Multifamily
Zoning
SMOP2
Occupancy
97%
Units
Unit Mix
20 x 1BR/1BA, 2 x 2BR/1.5BA
Multifamily Units
22
Amenities
private balconies
enclosed patios
First Time to Market in Over 57 Years - 2727 3rd Street was built by owner-builder in 1969 and has remained in the same family since original construction.
Signi?cant Rent Upside Through Natural Turnover
The property's 22 units exceed the approximately 12 units permitted by right under current SMOP2 (Ocean Park Low Density) zoning.
Major Building Systems Already Upgraded - Ownership has completed a full roof tear-off and modi?ed bitumen replacement ($29,900), a complete copper water re-piping of the entire building ($35,000), and installation of two automatic earthquake gas shut-off valves
Ocean Park Beachside Location with Walk Score of 93
Located approximately half a mile from Santa Monica State Beach, the property sits in a Walker's Paradise neighborhood with access to the Metro E Line, top-rated SMMUSD schools, and proximity to Silicon Beach's major technology and entertainment employers
Building Details
Building Size
17,020 SF
Year Built
1969
Stories
2
Units
22
Construction
courtyard-style
Listing Agency:
Marcus & Millichap - Encino
(818) 212-2678
Listed By:
Aida Memary · License #License(s): CA: 01980240
(818) 212-2678
Source:
Marcusmillichap
Added: Aug 20
Changed: Aug 24
Last Checked: Aug 30 at 1:00PM
Displayed information is deemed reliable but is not guaranteed and should be independently verified. All listing content including descriptions, pricing, images are the copyrighted material of Marcus & Millichap - Encino
Investment Insights
Based on property information with market context.
Built in 1969, this two-story courtyard apartment property at 2727 3rd St. contains approximately 17,020 square feet of rentable space and 22 residences. The unit mix includes 20 one-bedroom, one-bathroom apartments and two two-bedroom, one-and-a-half-bathroom residences. One-bedroom units measure 750 square feet, while the two-bedroom layouts reach 1,010 square feet. Select upper-level apartments include private balconies with ocean and neighborhood views, and ground-floor residences offer enclosed patios. The property also provides 22 covered, gated parking spaces.
The asset is in Santa Monica’s Ocean Park neighborhood, a short distance from Main Street dining and boutique retail and less than half a mile from Santa Monica State Beach. Existing density exceeds the approximately 12 units permitted under current SMOP2 zoning; the 22-unit configuration dates to the property’s 1969 construction and is legally non-conforming.
The asset is in Santa Monica’s Ocean Park neighborhood, a short distance from Main Street dining and boutique retail and less than half a mile from Santa Monica State Beach. Existing density exceeds the approximately 12 units permitted under current SMOP2 zoning; the 22-unit configuration dates to the property’s 1969 construction and is legally non-conforming.
Key Highlights
- 22‑unit apartment property with approximately 17,020 square feet of rentable space
- Unit mix includes 20 one‑bedroom units and two two‑bedroom residences
- One‑bedroom layouts measure 750 square feet; two‑bedroom units reach 1,010 square feet
Financial Insights
Estimated NOI and Cap Rate
NOI = area × lease_rate × (100 − vacancy) / 100 × (1 − expense_ratio). Net Operating Income — what the owner takes home each year before mortgage payments and income tax. Effective rent (asking rent minus vacancy losses) minus operating costs (taxes, insurance, maintenance, management).
NOI / Yr
$273,865
Cap rate = NOI / list price × 100. Capitalization rate — annual return on a fully cash purchase, before financing. NOI divided by price. Higher means more income per dollar invested, but usually also more risk or older condition. 5–8% is typical for stabilized commercial property; double digits often signal distressed deals.
Cap Rate
3.58%
Suggested Prices Based on Cap Rates
Cap rates vary significantly by property type, market, and asset quality.
Typical U.S. stable-market ranges:
Multifamily — 4.5% to 6.5% (Class A in primary markets often sub-5%; Class C in secondary markets 6%+)
Industrial / Logistics — 5.0% to 7.0% (compressed heavily in recent years due to e-commerce demand)
Office — 6.5% to 9%+ (wide spread post-2020; CBD Class A vs. suburban Class B varies dramatically)
Retail — 5.5% to 8.5% (grocery-anchored on the low end, unanchored strip centers higher)
Hospitality / Hotels — 7.5% to 10%+ (higher due to operational risk)
Self-Storage — 5.5% to 7.5%
Medical Office — 6.0% to 7.5%
Net Lease (single tenant, credit) — 5.0% to 7.0% depending on tenant credit and lease term
Rules of thumb:
Primary markets (NYC, SF, LA, Boston, DC) trade at lower cap rates than secondary/tertiary markets, often by 100–200 bps (bps, aka basis points; 1 bp = 0.01%).
Class A assets trade ~50–150 bps tighter than Class B, and Class B tighter than Class C.
Cap rates move inversely with price — a lower cap rate means a higher price for the same NOI.
Spread to the 10-year Treasury is a common benchmark; historically 200–400 bps over the 10-year.
Cap Rate 5%
$5,477,300
$5.5M
Cap Rate 7%
$3,912,357
$3.9M
Cap Rate 9%
$3,042,944
$3.0M
Market Conditions
NOI Build-Up for 17,020 SF
Vacancy — income lost from leasable area expected to sit empty during the year, subtracted from gross rent.
EGI (Effective Gross Income) — gross rent minus vacancy losses, the realistic income before paying operating costs.
OpEx (Operating Expenses) — recurring costs to operate the property (property tax, insurance, utilities, maintenance, management); excludes financing and capital improvements.
NOI (Net Operating Income) — income a property generates after operating costs but before financing and taxes.
Gross rent
$541.2K $31.80/SF
− Vacancy
−$43.3K −$2.54/SF
EGI
$497.9K $29.26/SF
− OpEx
−$224.1K −$13.17/SF
NOI
$273.9K $16.09/SF
Area
Los Angeles County, CA
Vacancy
8.00%
Lease Rate
$31.80 /SF/Yr
Expense Ratio
45.00%
Simulate Cap Rate and NOI
Suggested Prices Based on Cap Rates
Cap rates vary significantly by property type, market, and asset quality.
Typical U.S. stable-market ranges:
Multifamily — 4.5% to 6.5% (Class A in primary markets often sub-5%; Class C in secondary markets 6%+)
Industrial / Logistics — 5.0% to 7.0% (compressed heavily in recent years due to e-commerce demand)
Office — 6.5% to 9%+ (wide spread post-2020; CBD Class A vs. suburban Class B varies dramatically)
Retail — 5.5% to 8.5% (grocery-anchored on the low end, unanchored strip centers higher)
Hospitality / Hotels — 7.5% to 10%+ (higher due to operational risk)
Self-Storage — 5.5% to 7.5%
Medical Office — 6.0% to 7.5%
Net Lease (single tenant, credit) — 5.0% to 7.0% depending on tenant credit and lease term
Rules of thumb:
Primary markets (NYC, SF, LA, Boston, DC) trade at lower cap rates than secondary/tertiary markets, often by 100–200 bps (bps, aka basis points; 1 bp = 0.01%).
Class A assets trade ~50–150 bps tighter than Class B, and Class B tighter than Class C.
Cap rates move inversely with price — a lower cap rate means a higher price for the same NOI.
Spread to the 10-year Treasury is a common benchmark; historically 200–400 bps over the 10-year.
Cap Rate 5%
$5,477,300
Cap Rate 7%
$3,912,357
Cap Rate 9%
$3,042,944
Alternative Uses
Best Use
Apartment 5plus
$3.91M
$3.42M – $4.56M
NOI $273,865 @ 7.0% cap · market cap 3.58%
Second Best
—
—
no second resolved use
Theoretical Best
Office A
$9.11M
$7.97M – $10.63M
NOI $637,871 @ 7.0% cap · market cap 8.34%
Zoning and permitted uses should be independently verified with authorities.
Property Analytics
Property Profile
Current Use
Lease Details
22
Residential units
Location Intelligence
Trade Area within ½ mile
3,319
Businesses Nearby
Explore this area
Business Placement
Demographics for 90405, CA
27,966
Population
15,726
Households
1.8
Avg Household Size
43
Median Age
70%
College-Educated
96%
High-School Grad
2.8 sq mi
ZIP Area
9,988
Density / Sq Mi
$114,489
Median Household Income
$84,727
Median Earnings
$2,311
Median Rent
$1,940,700
Median Home Value
Market
Vacancy Rate% for Multifamily in West region
Questions? Ask Rey
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Frequently Asked Questions
What type of property is this?
Apartment building - Two-story multifamily property with covered parking, private outdoor areas, and a mix of one- and two-bedroom residences.
Where is this apartment building located?
The property is located at 2727 3rd St Santa Monica, CA.
What is the asking price?
The asking price for this property is $7,650,000.
What are key features of this property?
This property features: 22‑unit apartment property with approximately 17,020 square feet of rentable space; Unit mix includes 20 one‑bedroom units and two two‑bedroom residences; One‑bedroom layouts measure 750 square feet; two‑bedroom units reach 1,010 square feet
