Understanding Cost Per Unit & Cost Per Foot: Key Metrics for Valuing Multifamily Apartment Buildings

When owners begin evaluating the value of a multifamily property in Los Angeles, two essential pricing metrics often come up early in the conversation: Cost Per Unit (CPU) and Cost Per Foot (CPF).

These metrics are simple, highly comparable across neighborhoods, and widely used by investors, appraisers, buyers, and brokers to benchmark pricing and understand how a property stacks up against recent sales.

While CPU and CPF are not the only valuation tools investors rely on, they are two of the most important starting points—especially in a market as segmented and neighborhood-specific as Los Angeles County.

What Is Cost Per Unit (CPU)?

Cost Per Unit measures the price of a building divided by the number of units.It is one of the fastest ways investors compare apartment buildings of different sizes and locations.

Formula

Cost Per Unit = Sale Price ÷ Number of Units

Example:

A 10-unit building selling for $3,500,000:

$3,500,000 ÷ 10 = $350,000 per unit

This allows buyers to immediately compare your property to all other “per-door” sales in the area.

Why Cost Per Unit Matters

Investors rely on CPU because it helps them understand:

• Affordability per unit

• Neighborhood market levels

• Degree of rent control or income restrictions

• Whether the price is aligned with similar buildings

• Value-add potential on a per-unit basis

In Los Angeles, CPU varies dramatically based on:

• Neighborhood

• Parking availability

• Building age

• ADU potential

• Condition of interiors

• RSO/AB1482 restrictions

• Vacancy and loss-to-lease

• Unit mix (Studios vs. 1+1 vs. 2+2 vs. Town home units)

What Is Cost Per Foot (CPF)?

Cost Per Foot (also called Price Per Square Foot) measures the price of a building relative to its total square footage.

Formula

Cost Per Foot = Sale Price ÷ Building Square Footage

Example:

A 7,200 SF building selling for $3,456,000:

$3,456,000 ÷ 7,200 SF = $480 per foot

Why Cost Per Foot Matters

CPF offers insight into:

• Replacement cost vs. purchase price

• Building quality and construction type

• Renovation levels

• Neighborhood demand

• Whether the pricing aligns with local comps

While CPU looks at value per door, CPF looks at value per square foot, which matters to investors analyzing:

• Larger unit sizes

• Town home layouts

• Newer construction

• Buildings with upgraded interiors

CPU vs. CPF: How They Work Together

These metrics provide different—but complementary—insights:

Metric	Measures	Best For
Cost Per Unit (CPU)	Price per door	Neighborhood comparisons & quick pricing benchmarks
Cost Per Foot (CPF)	Price per square foot	Understanding building quality, renovations, and construction value

Smart buyers look at both when deciding whether a listing price is fair.

Limitations of CPU and CPF

While valuable, these metrics do not factor in:

• Net operating income

• Expenses or utility obligations

• Rent control restrictions

• Deferred maintenance

• Value-add potential

• Vacancy

• Cap rate

• GRM

• Cash-on-cash return

This is why investors also consider Cap Rate, GRM, NOI, rental upside, and market-specific dynamics.

What CPU and CPF Mean for Your Property’s Value

When owners request an evaluation, our team at JML Real Estate Group looks at:

• CPU & CPF of recently sold comps

• Active listings (adjusted for unrealistic pricing)

• Unit mix and tenant profiles

• ADU potential

• Rent control status

• True vs. pro-forma income

• Neighborhood demand

• Renovation quality

• Local investor trends

This creates a complete, accurate valuation—one that reflects what buyers are actually paying right now.

Thinking About Selling Your Apartment Building in Los Angeles?

Understanding Cost Per Unit and Cost Per Foot is one of the most important steps in determining your building’s true market value.

If you'd like:

• A confidential property valuation

• A pricing strategy based on real comps

• Expected CPU, CPF, GRM, and Cap Rate

• Guidance on timing the market

• An honest breakdown of what your building would sell for today

My team and I would be happy to assist.

No obligation. No pressure. Just clear data and expert insights.