Most investment property is sold on a story. 1048–1052 S Los Angeles Street is sold on arithmetic. Fifteen units of mixed-use office and retail on a signalized corner in the Fashion District, fully rebuilt in 2009, offered at $4,950,000 against $251,516 of 2025 net operating income — a 5.08% going-in cap rate, with the drivers of a meaningfully higher stabilized yield already inside the building.
Start with what the price does not include
As of July 1, 2026, the City of Los Angeles applies its ULA transfer tax at 4% on sales above $5.4 million. That single line has reshaped the DTLA investment market: activity in the $5M-plus band has thinned dramatically as sellers hold rather than surrender 4% of gross proceeds at closing.
1048 S Los Angeles Street asks $4,950,000 — under the line. That matters twice. Going in, a buyer is not competing in the congested tier just above the threshold. Going out, the asset can change hands under the threshold again, which means it keeps the exit liquidity that larger DTLA assets have visibly lost. In a market where the tax turns on a single dollar of price, an income property that pencils below $5.4M is a structurally different — and more tradable — asset than one just above it.
The upside is already in the rent roll
In-place rents at the property run roughly ten years below market. Eleven of fifteen units are occupied, largely on month-to-month terms. Read that as an operator, not a spreadsheet: four units of immediate lease-up, and a tenancy structure that permits repositioning the day after close — no waiting out long leases, no buyout negotiations. The 5.08% cap is the floor of the story, not the ceiling. Individual sub-meters keep utility exposure with the tenants, and the 2009 rebuild means the capital-expenditure profile looks nothing like the century-old stock that surrounds it.
Compared with the alternatives
Los Angeles multifamily trades at comparable or lower cap rates — with state rent caps under AB 1482, city rent stabilization, and a tenant-regulatory environment that grows tighter, not looser. Commercial tenancies at 1048 carry none of that: rents move to market when the market moves.
Downtown office towers offer the opposite problem — distress pricing that looks cheap until the vacancy, the capital stack and the re-tenanting costs are underwritten honestly. A 15-unit building with small-bay spaces serving Fashion District businesses is a different animal from a half-empty tower floor.
Single-tenant NNN retail delivers a similar coupon with zero upside and binary risk: one tenant, one lease, one credit. Fifteen units diversify the income the way one drugstore lease never can.
Bonds and cash pay less, with no rent growth, no depreciation shelter, no leverage, and no ability to add value with management — which, on this building, is precisely where the return lives.
Three buyer profiles, one building
A 1031 exchange buyer on the 45-day clock gets stabilized, income-producing like-kind property with documented financials. An owner-user can occupy space for their own operations with SBA 504 financing at as little as 10% down while tenants help carry the building. A value-add investor gets the cleanest version of the trade: buy under the ULA line at a 5.08% going-in yield, mark a decade of below-market rents to market, lease four units, and hold or exit — still under the line.
The honest caveats
This is Downtown Los Angeles in a reset market: underwriting should assume patient lease-up, realistic Fashion District rents rather than trophy-corridor numbers, and an operating plan — not a passive coupon. That is exactly why K2 publishes the rent roll and the 2025 operating numbers rather than a pro forma. The building rewards an owner who runs it; K2 has managed buildings on these blocks for thirty-five years and can say precisely what that takes.
Frequently asked
What is 1048 S Los Angeles Street?
A 15-unit mixed-use office and retail building on a signalized corner lot in the Downtown Los Angeles Fashion District, fully rebuilt in 2009, offered exclusively through K2 Investment, Inc. at $4,950,000 — a 5.08% cap rate on $251,516 of 2025 net operating income.
Why does the Measure ULA threshold matter for this property?
As of July 1, 2026, the City of Los Angeles ULA transfer tax applies at 4% on sales above $5.4 million. At $4,950,000, this property trades below the line — and an asset that can change hands under the threshold keeps exit liquidity that larger DTLA assets have visibly lost.
Where is the upside?
In-place rents run roughly ten years below market, four of fifteen units are available for lease-up, and month-to-month tenancies allow repositioning immediately after close — so the 5.08% going-in yield understates the stabilized number.
Is it suitable for a 1031 exchange?
Yes. It is stabilized, income-producing commercial property that qualifies as like-kind replacement property, and K2 has deep experience with the 45-day identification and 180-day closing timeline.
Can an owner-user buy it?
Yes. A business occupying part of the building may qualify for SBA 504 financing with as little as 10% down, occupying space for its own operations while tenants help carry the building.
See the full listing, financials and gallery → or call K2 at (213) 624-0490.