Downtown LA lofts - wise investment?

[Spydey]

what is everyones opinion on purchasing a loft in downtown LA right now? is it a good time now or should i wait until the prices go down when more buildings get built?

[archd1]

If you're investing for the long term, say 10 to 15 years before flipping it, then now is a good time to buy as any other. Prices have dropped somewhat the past few months compared to a year ago, but had stabilized. Forecasters predict that in the still hot LA real estate market (Westside, Beaches, the Hills and DTLA) a drop of 5% to 7% is likely. A drop greater than 15% is unlikely in these areas. There is speculation that prices will go up once all the major residential projects in DTLA had been completed within the next 5 years including LA Live, Grand Ave. project, Cornfiled Park, Metro Rail to East LA and Culver City and the revitalization of the LA river (though the river project would take much much longer). A recent DTLA study by the LAEDC stated that the average income of new DTLA residents is $99,000/yr and average age is 31, half are single, almost all are professionals or own businesses. The resdential population had also increased by as much as 21%. I am looking for a loft myself and although the area is not as vibrant as the Westside, it is only a matter of time before DTLA completely transforms itself. The momentum is there and there's no stopping it. So I think this year, until next year, is a good time to buy while prices are fairly reasonable.

[Spydey]

my budget is between 400-500K - what is the likelihood of purchasing a decent sized one bed room at that price - ideally i would love to get a 2 bedroom however I doubt that will happen.

How many square feet should I expect a typical one bedroom to be in DTLA?

[hesed]

Originally Posted by Spydey

my budget is between 400-500K - what is the likelihood of purchasing a decent sized one bed room at that price - ideally i would love to get a 2 bedroom however I doubt that will happen.

How many square feet should I expect a typical one bedroom to be in DTLA?

I'm buying a 1 bedroom loft, about 900sf, in the Rowan building which is right in the middle of your prince range. I also looked at the Little Tokyo Lofts, where comparably priced units were a little bigger. So I think you should be able to find something in that range.

[Spydey]

Originally Posted by hesed

I'm buying a 1 bedroom loft, about 900sf, in the Rowan building which is right in the middle of your prince range. I also looked at the Little Tokyo Lofts, where comparably priced units were a little bigger. So I think you should be able to find something in that range.

hesed: what made you decide to purchase a place at the Rowan as opposed to any of the other lofts in the area?

originally i wanted to get one of the buildings in the south park area but it's just too expensive - i am currently considering Rowan, brockman, roosevelt, little tokyo..any other suggestions?

[MapGoulet]

Originally Posted by Spydey

hesed: what made you decide to purchase a place at the Rowan as opposed to any of the other lofts in the area?

originally i wanted to get one of the buildings in the south park area but it's just too expensive - i am currently considering Rowan, brockman, roosevelt, little tokyo..any other suggestions?

Check out the Chapman. Gorgeous building and good floor plans but at more reasonable price points. Retail in area is behind the curve, but that probably helps keep the prices down.

[hesed]

Originally Posted by Spydey

hesed: what made you decide to purchase a place at the Rowan as opposed to any of the other lofts in the area?

originally i wanted to get one of the buildings in the south park area but it's just too expensive - i am currently considering Rowan, brockman, roosevelt, little tokyo..any other suggestions?

I was really impressed with the quality that the developer put into the Douglas, which I believe is the developer's first project downtown. We liked the feel of the building, with exposed brick in most units. The kitchens that the developer is putting in the building are nicer than I've seen anywhere else, and we were able to choose colors, etc., at no extra cost.

We considered some of the other places you mentioned...The Roosevelt was more expensive, and it seemed like they were shooting for more of a super-luxury vibe that we didn't really jive with. We toured Little Tokyo Lofts and, while we could get more for our money there, there were several things we didn't like. Location was probably the biggest factor, but the quality of the units was inferioir to what we saw at the Rowan. On top of that, the sales person didn't do a very good job, and basically just confused us by showing us every available unit in the place without regard to our price range.

I'd recommend that you contact the Rowan sales office. They'll be happy to show you the building, even though it's still under construction. We've been working with Millie and she has been incredibly helpful.

Good luck in your search!

[Spydey]

thank you hesed for sharing your experience! rowan will definitely be on my list and actually i signed up for the interest list last night and millie already left me a message today...

btw, what is your approximate move in date?

[hesed]

Originally Posted by Spydey

thank you hesed for sharing your experience! rowan will definitely be on my list and actually i signed up for the interest list last night and millie already left me a message today...

btw, what is your approximate move in date?

That's the same thing that happened to us. She called the day after we signed up on the interest list.

Last we heard move in was slotted for late 2007. We figure sometime from Nov. 07 to Feb. 08 at this point. Kind of a big window, but it gives us time to save up for the rest of the down payment. Last time I asked Millie she did say that the construction was on schedule, so that's good to hear.

I'll be interested to hear what your impressions of the building, etc. are after you go take a tour.

Good luck!

[colemonkee]

Just to temper your expectation, add a few months to whatever the move in dates the developers give you. That seems to be the norm. It has a lot to do with the City and the Department of Real Estate's very slow approval process in getting the certificates of occupancy.

For example, both Eastern Columbian and Pan American were slated for "late 2006" move-ins. Eastern Columbian started select move-ins late last month (with most people moving in mid-March), and Pan American hasn't even started move-ins yet.

[danparker276]

I took a look at the Rowan. That place won't be ready for a long time, there is a lot of work to do. I'd add a year to that estimate, late 2008-2009.

[Spydey]

hmm that might be an issue since i will be probably performing a 1031 transfer

[PeterJ]

Yes, I'd say definitely allow for a significant delay. The combination of old building, lots of construction, and volumes of red tape means that most likely there will be a delay. I'd say Eastern Columbia took about 6 months longer than I expected it would. And I was already taking into considerations a few months worth of delays. When we signed up, they were saying summer 06 for completion. We just moved in two weeks ago. Given all that, it was still worth it. it's easier to handle the wait if you know to expect it and take everything that a sales rep says with a shaker of salt.

[MapGoulet]

Good rule of thumb: The more different the project is from others, the longer it will take. Downtown LA is still for creative developers, not the KB's of the world. Infill is not easy and there are more surprises than in raw-land and greenfield development. So assume delays always.