SoldBroker Activity · Entry № 69

$2.45M and $353/SF — Melrose: Why I Like It

An investor's path to an 8–10% cap rate.

PublishedJuly 4, 2026
StatusSold · Just Closed
DatelineThe Tape · Melrose / West Hollywood Submarket, Los Angeles
7974-7978 Melrose Ave hero photo
FIG. 01, 7974-7978 MELROSE AVE, LOS ANGELES CA 90046. LISTING PHOTO VIA COSTAR.
Four takeawaysFour things an operator takes from this trade.
  1. You're Buying Melrose at a Good Basis.    At $2.45 million, or $353 per building square foot, I think the buyer paid 30-40% below what investors were often paying for similar assets. 
  2. The Leasing Story.  Current asking rents for the available storefronts are $71.40/SF NNN, placing this property among the higher-priced retail offerings on Melrose. The corridor average is closer to $55.50/SF, but the best corners continue to command premium pricing. If the owner successfully leases the vacancies and upgrades the tenant mix, today's income could look very different a few years from now.
  3. Tenant Improvements. It takes capital to modernize storefronts, attract quality tenants, negotiate leases, and improve curb appeal.  With $250,000 this property will look modern and attract tenants that want to be in this location. 
  4. This Is a Value-Add Leasing Play.   I don't think the buyer is underwriting today's income, he saw the upside. Lease the ground floor at $60/SF, reposition the second floor around $32/SF, and the property could generate roughly $320,000 in gross income and $288,000 in NOI. After factoring in tenant improvements, leasing commissions, and renovations, total project costs could reach $2.9–3.2 million, resulting in a realistic 9–10% stabilized yield on cost.
Deal Stats · 7974-7978 Melrose Ave
Sale Price
$2,450,000
closed May 15 2026
Property Type
Storefront Retail
CoStar classification
Year Built
1925
101 years old
Gross SF
6,943 SF
per CoStar
Price / SF
$352.87/SF
on gross building area
Lot SF
N/A
not provided
CAP Rate
Not Disclosed
no income data published
GRM
Not Disclosed
no rent roll provided
Submarket
West Hollywood
CoStar submarket
RSO / LARSO
Applicable
1925 build, LA city
ULA Status
Below Threshold
Measure ULA does not trigger
Sale Type
Investment
CoStar classification

What an Operator Sees

I see someone who bought one of the best corners on Melrose at what I believe is a great basis.

With a lower acquisition cost, strong leasing fundamentals, and the opportunity to upgrade the property over time, the buyer has multiple ways to create value. Lease the vacant space, improve the tenant mix, and invest in strategic renovations, and this deal could look very different 3 years from now when the investor turns this into a 9% cap rate.  

That's why I like this deal.

I track every commercial real estate sale in Los Angeles so you don't have to.

If you found this useful, share it.

OMs: David@AtlasBrief.LA

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Written from the field

David Safai, operator, developer, GC.

Atlas Home Builders, Inc. is a Los Angeles owner-operator and general contractor. If you are a broker with a listing you want an honest read on, send the OM and the T-12 to David@AtlasBrief.La.

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