A stabilized multifamily property has achieved its ongoing operating profile — occupancy at submarket norm, rent roll at achievable levels, expense ratios in line, minimal near-term vacancy or turnover risk.
Stabilization typically means 94-95%+ occupancy, rents at or near levels the submarket supports for the building class, and operating expenses in normal range. A newly built or heavily renovated property is "lease-up" until it reaches stabilization — typically 6-24 months after delivery or major renovation.
Buyers underwrite stabilized assets at different cap rates than lease-up or value-add properties. Stabilized is where the deepest buyer pool lives.
LA multifamily occupancy average 94.5% (Colliers Q4 2025). Stabilized LA multifamily trades at the tightest cap rates within its submarket. Buildings below 90% occupancy or with material rent roll issues trade at meaningfully wider cap rates until stabilization is demonstrated.
From the Sterman LA Multifamily Glossary — defined the way a broker with $1.41 billion across 254 closed transactions actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
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