For the past few years, cap rates have mostly moved one direction: up. If you own a 5+ unit building in Long Beach, you've felt that in your valuation even if your rent roll never changed. But the data coming out of the first half of 2026 shows something different starting to happen, and it's worth understanding what it means for your building specifically.

The National Picture: Cap Rates Are Compressing, Slowly

CBRE, one of the most closely watched commercial real estate research firms in the country, projected in its 2025 market outlook that national multifamily cap rates would fall by 17 basis points from their 2024 peak by the end of 2025. That's a modest move, not a snapback, but it marked the first real reversal after two years of steady expansion.

CBRE's outlook for 2026 builds on that trend. The firm expects cap rates across most commercial property types to compress by another 5 to 15 basis points this year, driven by a mix of increased transaction volume, more competitive lending conditions, and growing institutional capital returning to the sector. CBRE's most recent data also shows multifamily vacancy nationally fell 20 basis points in the first quarter of 2026 to 4.8%, while new construction completions dropped 30% year over year, a sign the supply wave that's been pressuring rents is finally easing.

Where Long Beach Stands Today

Long Beach has never traded like the rest of Los Angeles, and that's exactly why it matters here. Core Westside neighborhoods like Beverly Hills and West Hollywood are trading as tight as 3.5% to 5.0%, while the broader LA metro averaged a 5.6% cap rate across all building classes in the first quarter of 2026. Long Beach and the South Bay submarket, by contrast, have consistently traded higher, generally in the 5.0% to 6.5% range, with CoStar putting the Long Beach citywide average around 6.0% over the trailing 12 months.

Our own tracking of recent Long Beach 5+ unit transactions puts the local average closer to 6.1%, consistent with that broader submarket range. That gap between Long Beach and the core LA neighborhoods isn't a flaw. It's a yield premium, and it's part of why value-add buyers keep circling this market even when financing gets more expensive.

What Easing Supply Means for Your Rent Roll

New construction completions falling 30% year over year isn't just a national talking point. It's a signal that the competition your building has been facing from new lease-up product should start to thin out over the next several quarters. Fewer new units hitting the market generally means less pressure on concessions and more room for occupancy and rents to firm up.

On the regulatory side, the statewide rent cap under AB 1482 for the Los Angeles-Long Beach-Anaheim region is set to rise to 8.7% for the period running from August 2026 through July 2027, up from 8.0% the year before, tied to the region's CPI. That ceiling matters for how much upside is realistically available on covered units, and it's a number worth building directly into your underwriting rather than treating as background noise.

What This Means If You're Deciding Whether to Sell or Hold

None of this points to a dramatic repricing. Cap rate compression at the pace CBRE is projecting is gradual, and Long Beach's higher yield relative to core LA neighborhoods isn't going away overnight. But the direction has shifted for the first time in years, and that shift tends to move first in advance of broader repricing, not after it.

If you've been waiting for a clearer signal before deciding whether to sell, refinance, or hold, this is close to it. Owners who understand exactly where their building sits today, against real Long Beach data rather than a guess, are in the best position to act on whichever option makes sense for them.