Los Angeles commercial real estate loans

Most older apartment buildings in the City of Los Angeles are covered by the Rent Stabilization Ordinance, which applies to buildings with a certificate of occupancy on or before 1978-10-01. The allowable annual increase in Corin's rent-control table is 3% for 2026-07-01 to 2027-06-30. Unincorporated areas of the county have their own ordinance, and several incorporated cities, including Beverly Hills, Culver City, Inglewood, Long Beach, Pasadena, Santa Monica, and West Hollywood, have rules of their own.

Newer or exempt buildings fall under the statewide cap in AB 1482, which is 5% plus the regional change in the Consumer Price Index, capped at 10%. A lender will model growth under whichever rule applies to the specific building, so the address, the year of the certificate of occupancy and the unit mix all matter.

For HUD 223(f) and agency loans, in-place rents under stabilization often leave coverage, not loan-to-value, as the limit. The HUD market-rate box is 87% loan-to-value and 1.15x coverage; the loan is whichever test gives less.

Assisted living and memory care communities in California are generally licensed as residential care facilities for the elderly by the Department of Social Services, and skilled nursing facilities are licensed by the Department of Public Health. A lender, and HUD for a Section 232 loan, will confirm that the license is in good standing and that the operator has the experience to run the building before they look at proceeds.

A stabilized facility can often refinance into HUD 232 (80% loan-to-value and 1.45x coverage in Corin's assumptions). A facility that is newly built, newly acquired or still filling usually starts with a bridge loan and refinances once it reaches the occupancy and income HUD wants.

Los Angeles hotels range from brand-flagged airport and downtown properties to independent and boutique hotels on the Westside and in the Valley. Conduit lenders set different debt yield floors by hotel type (11.0% for a premium flag, 12.0% for economy and 12.5% for boutique or independent in Corin's assumptions), so the same income can support different loans.

Owner-operators buying or refinancing their own hotel often compare SBA 504 against conduit debt, and a hotel facing a franchisor renovation requirement can use a PIP bridge. The hotel debt yield calculator shows where a loan stands against the floors.

A sale in California resets the assessed value to the purchase price under Proposition 13, so a buyer's tax bill can be many times the seller's. The estimate above shows the size of the effect; the tax rate area's actual levy sets the real number.

The City of Los Angeles also taxes high-value property sales with a tiered measure that took effect in 2023, on top of county and documentary transfer taxes. Rates and thresholds change over time, so confirm current figures with title and escrow before pricing a deal.

Seismic diligence is routine. The City of Los Angeles has mandatory retrofit ordinances for certain soft-story wood-frame and non-ductile concrete buildings, and lenders ask for the compliance status of covered buildings along with engineering reports where required.