Quote:
Originally Posted by colemonkee
Aaaaaaaaand cue citywatch!
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Marketing Campaign Hypes Downtown L.A. Loft Living
By KEELEY WEBSTER
CREJ Staff Writer
Some real estate watchers may doubt the longevity of the downtown Los Angeles residential market, but don't count Coldwell Banker Wilshire Real Estate in their ranks. Coldwell opened a home center at its mid-Wilshire offices to market downtown condominium projects for a number of different developers.
"We see downtown as a new frontier," said Herbert McGurk, marketing director for Coldwell Banker Wilshire Real Estate. "With an artistic and cultural community that is getting national attention, world-class dining against a backdrop of diverse ethnic fare, an eclectic shopping experience, and a growing live-work orientation, I believe it's a perfect time to move downtown."
Absorption has remained stronger for urban condominium projects in downtown than the single-family home market has in the suburbs, McGurk said, which is what prompted Coldwell Banker Wilshire to changes its focus. Home sales decreased by 16.8 percent in the entire Los Angeles market in June, although the median price of a home increased by 1.6 percent to $589,150 from a year ago, according to the California Association of Realtors. But CB Richard Ellis reported that condominium sales in downtown Los Angeles increased from 57 per month to 108 quarter-over-quarter with a 1.8 percent growth in sale price.
"We feel like there is a boom going on downtown and we were interested in representing the properties downtown," McGurk said.
With its New Home Center for Downtown Living, Coldwell plans to target people who already are working downtown, running the gamut from professionals to artists to students to investors. "We plan to target people who are exhausted from making the daily commute and annoyed at paying incredibly high gas prices," said Esther Kim, a manager at Coldwell Banker Wilshire Real Estate. With its location in mid-Wilshire, Coldwell also hopes to target the Korean American market, a demographic that has shown a preference for living in highly amenitized high-rise condominiums.
"I think it's a mark of the success of downtown that Coldwell Banker has decided to market what we are doing downtown to mid-Wilshire," said Carol Schatz, president and chief executive officer of the Central City Association. "We find the market is picking up steam every day."
Even though most of the downtown developers already have their own sales offices located in downtown Los Angeles, many were more than happy to capitalize on another opportunity to market their units for free. Projects being marketed at the center include 1010 Wilshire, 2121 Lofts, Barker Block, Biscuit Co. Lofts, The Chapman, Eastern Columbia, Evo, Little Toyko Lofts, Roosevelt Lofts, Rowan Lofts, Santee Village, Cornell and Eckhardt. Coldwell Banker also hopes to include more. April Fissell, director of Roosevelt LLC's sales team, expressed a great deal of enthusiasm about having her company's project included. She called the home center a testament to the variety of housing that exists downtown.
The downtown market is doing better than other areas, but John Burns, president of John Burns Real Estate Consulting, called the market a "wild card" during his speech at the Los Angeles County Economic Development Corp.'s Mid-Year 2007 Economic Forecast. Burns categorized downtown as such partly because he said it's tough to identify how much of the absorption downtown is coming from investors as opposed to home buyers. "The financial markets have been pricing that area like there's no risk, but what happens if the prices fall?" Burns asked.
For now, developers are still getting $600 to $1,000 per square foot for a condominium in downtown Los Angeles, Schatz said.
"The market is slower in other parts of the city because they are overbuilt," said Councilwoman Jan Perry. "We are not overbuilt and people are sick of commuting."
The supply of condominiums downtown is continuing to grow, however. Downtown has seen 7,500 units go up over the past five years and has another 7,500 units in the pipeline, according to Schatz. And with the turbulence in the single-family market there may not be enough new buyers to absorb all those units.
"The focus on foreclosures and subprime lending is ongoing and, coupled with higher inventories of homes for sale, is prompting many would-be buyers to play a 'wait-and-see' role," said Colleen Badagliacco, president of C.A.R. "First-time buyers continue to be impacted by tighter mortgage underwriting standards and the affordability challenge, which has not improved significantly despite price declines in most regions of the state."
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