Property Overview
North Hollywood, CA 91601
Exempt — 1985 Vintage
Very Low VMT
OZ Program Permanent
Investment Highlights
- Non-RSO Status. Exempt from the LA Rent Stabilization Ordinance. AB 1482 governs tenancy, permitting 5% + CPI annual increases (capped 10%) and full market-rate reset upon any vacancy — without any requirement to petition the city.
- Federal Opportunity Zone. The site qualifies for legacy OZ benefits: capital gains deferral and tax-free appreciation on a qualifying 10-year hold. The OZ program was made permanent under the One Big Beautiful Bill Act of 2025.
- 35.7% Rent Upside. In-place rents average $1,249/month against a $1,695/month studio market. The gap is structural, not speculative — it reflects long-term family-trust ownership. Natural turnover captures the upside with no evictions required.
- Studio Employment Corridor. Positioned 5–10 minutes from the nation's densest media employment cluster: Universal Studios/NBCUniversal, Warner Bros., CBS Radford, Disney Burbank, and Hollywood Burbank Airport.
- Metro B Line Access. Under 2 miles from the North Hollywood Metro B Line terminus — Metro's primary crosstown spine — and within walking distance of major bus rapid transit corridors.
- Clean Regulatory Profile. Post-1978 wood-frame construction: exempt from both the LA Soft-Story Retrofit Ordinance and the Alquist-Priolo Earthquake Fault Zone. No active code enforcement, no FEMA flood zone designation, no Hillside Ordinance area.
- No Ellis Act Exposure. AB 1482 Just Cause for Eviction Ordinance applies; the property is not subject to the LA Ellis Act framework, removing a material liability commonly associated with older RSO buildings.
- ADU Development Optionality. Eligible for up to 2 non-livable-space conversion ADUs plus 2 detached new-construction ADUs. AB 2097 eliminates parking minimums; AB 1033 enables future condo mapping and separate ADU sale.
- Estate Succession — Motivated Seller. The property transferred from family trust in February 2026. Free-and-clear of debt since 2013. Seller is positioned for a clean, straightforward close — no lender payoffs, no partnership complexity.
Four Reasons This Deal Works
North Hollywood — Valley Village Pocket
5638 Colfax sits in Valley Village, the quiet residential pocket between Studio City and the NoHo Arts District — a block north of Burbank Boulevard and one mile from Lankershim's entertainment corridor. It's one of the tightest rental markets in the San Fernando Valley: low new supply, high walkability for an urban Valley address, and a tenant pool drawn almost entirely from the entertainment and tech industries.
The NoHo Arts District — LA's designated performing arts and creative live-work hub — is within walking distance. Lankershim Boulevard's restaurant and bar corridor, NoHo Commons (Target, Regal Cinemas, dining), and multiple live music venues are all accessible without a car.
Driving, tenants are 5–10 minutes from every major studio: Universal Studios/NBCUniversal, Warner Bros., CBS Radford, Disney Burbank, and Hollywood Burbank Airport. This cluster employs tens of thousands of below-the-line workers who rent studios and one-bedrooms — the exact product this building delivers.
Location Drivers
- Metro B Line — North Hollywood terminus under 2 miles; direct rail to Hollywood, Downtown, Koreatown
- Highway 170 — Immediate freeway access north to the Valley, south to the 101
- Lankershim / Magnolia Corridors — Restaurant, retail, and nightlife density within 10-minute walk
- NoHo Arts District — Designated city arts corridor; cultural anchor for the submarket
- Supply Constraint — RD3-1 zoning with small lots limits new multifamily development; organic rent growth structurally supported
- AB 2334 Very Low VMT — Qualifies for streamlined environmental review on future development entitlements
Who Buys This Building & Why
Anticipated Buyer Objections
Studio Rent Comparables — North Hollywood
Three directly competing studio units within the immediate submarket establish the $1,695–$1,725/month market-rate range for a renovated or well-maintained 500 SF studio in Valley Village / North Hollywood.
| # | Address | Type | Size (SF) | Rent / Mo | Rent / SF |
|---|---|---|---|---|---|
| 1 | 11458 Burbank Blvd, North Hollywood | Studio | 500 | $1,696 | $3.39 |
| 2 | 5751 Camellia Ave, North Hollywood | Studio | 481 | $1,725 | $3.59 |
| 3 | 5020 Tujunga Ave, North Hollywood | Studio | 500 | $1,699 | $3.40 |
| Comp Average | 494 | $1,707 | $3.46 | ||
| 5638 Colfax — In-Place | 550 | $1,249 | $2.27 | ||
Current Rent Roll vs. Market
| Unit | Type | SF | In-Place Rent | Rent / SF | Market Rent | Market / SF |
|---|---|---|---|---|---|---|
| Unit 1 | Studio | 550 | $1,249 | $2.27 | $1,695 | $3.08 |
| Unit 2 | Studio | 550 | $1,249 | $2.27 | $1,695 | $3.08 |
| Unit 3 | Studio | 550 | $1,249 | $2.27 | $1,695 | $3.08 |
| Unit 4 | Studio | 550 | $1,249 | $2.27 | $1,695 | $3.08 |
| Unit 5 | Studio | 550 | $1,249 | $2.27 | $1,695 | $3.08 |
| Unit 6 | Studio | 550 | $1,249 | $2.27 | $1,695 | $3.08 |
| Unit 7 | Studio | 550 | $1,249 | $2.27 | $1,695 | $3.08 |
| Unit 8 | Studio | 550 | $1,249 | $2.27 | $1,695 | $3.08 |
| Total (8 Units) | 4,400 SF | $9,992 / mo | $2.27 | $13,560 / mo | $3.08 | |
Operating Statement — In-Place vs. Pro Forma
In-Place (Current Rents)
Pro Forma (Market Rents)
Closed Sale Comparables — North Hollywood
Both closed comps are same-vintage (mid-1980s), same-submarket (North Hollywood), same product type (small studio multifamily), and transacted within the past 12 months. They establish the trading range for stabilized or near-stabilized assets in this corridor and provide the income-per-dollar context for underwriting Colfax's value-add yield story.
| # | Address | Units | Built | Closed | Sale Price | $/Unit | Cap Rate | GRM |
|---|---|---|---|---|---|---|---|---|
| 1 | 11218 Oxnard St, North Hollywood | 6 | 1985 | Sep 2025 | $2,000,000 | $333,333 | 5.80% | 11.95x |
| 2 | 5621 Klump Ave, North Hollywood | 9 | 1987 | Jul 2025 | $2,450,000 | $272,222 | 5.31% | 13.01x |
Suggested List Range
Defensible List Range
Pricing Rationale
The recommended range reflects the property's in-place income position — not the stabilized comp multiples. Buyers correctly underwrite this asset as a value-add entry: the in-place yield of 5.6–5.8% is the starting point, and the path to a 7.3–7.8% stabilized cap rate is through natural tenant turnover at no additional capital cost. Applying the closed comp GRM (11.95–13.01x) directly to Colfax's $119,904 in-place GSR produces a range of $1.43M–$1.56M — consistent with the upper bound of our recommended range.
The estate sale dynamic (no debt, family trust dissolution, free-and-clear) supports a clean, prompt close and removes the escrow complexity typical of leveraged sellers. Qualified buyers who can close in 30–45 days will find a seller willing to transact at the right number.
Expected trade range: $1,300,000 – $1,425,000 based on LAAA's experience with comparable Non-RSO value-add assets in North Hollywood and Van Nuys.
LA Apartment Advisors · Marcus & Millichap
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