Downtown Housing Renaissance Keeps Rolling
Publish Date: 06/01/2004
CALIFORNIA REAL ESTATE JOURNAL
June 1st, 2004
Los Angeles’ central business district experiences a second wave of adaptive-reuse project groundbreakings and grand openings.
By: CHRIS TOLLES
CREJ Staff Writer
Fueled by the adaptive-reuse ordinance, the popularity of transit-oriented living and the mixed-use craze, multifamily-housing development in downtown Los Angeles continues at a frenetic pace.
To date, the adaptive-reuse ordinance has created 1,673 downtown multifamily-housing dwellings and hotel rooms, with 2,504 units under construction, 835 units in the planning process, 1,122 under immediate consideration and 2,000 units for future consideration, according to Hamid Behdad, director of the cities adaptive-reuse program.
Featuring primarily luxury apartments, the downtown residential boom signals what many have called the start of downtown’s transformation from an after-work ghost town to a thriving 24-hour urban community.
Mark Weinstein of MJW Investments, developer of the recently opened Santee Court, said lenders have a newfound willingness to finance multifamily-housing projects downtown.
“When I started, I couldn’t get the lenders to commit,” Weinstein said. “[Now], I have offers for financing for all my other spaces. I proved we could do this.”
Washington Mutual and Fremont Investment & Loans provided $29 million and $20 million, respectively, for the financing of Santee Court, located on Los Angeles Street between Seventh and Eighth Streets.
The property, according to the developer, is the largest adaptive-reuse project in Los Angeles. When completed, Santee Court and the other adaptive-reuse projects opening in downtown Los Angeles represent the tip of the iceberg in terms of filling the region’s housing demand.
Statewide, 100,000 new housing units are needed each year to fill the demand, which translates to 10,000 units a year in Los Angeles, according to Behdad, well above the number of units being built.
Nonetheless, the activity in downtown Los Angeles is making a dent.
“We absorbed more units downtown last year than ever before,” said Hal Bastian, director of economic development for the Downtown Center Business Improvement District.
GROUNDBREAKINGS, GRAND OPENINGS
Weinstein is at the vanguard of the second wave of downtown housing developers.
The first wave, which was led by Tom Gilmore’s Old Bank District projects and the Pegasus building, adjacent to the new Standard Hotel, have become well-seasoned properties.
Most of the projects in that first wave boast occupancies above 90 percent and rents of $2 per square foot and higher.
MJW held a grand opening for Phase I of the project on May 21. The first phase features 165 for-rent lofts, 50 of which were leased before development had completed, and 40,000 square feet of retail, according to Weinstein.
Rents at the development, according to the developer, range from $1,300 to $2,500 per month.
Amenities include a rooftop pool, spa, basketball court, putting green and garden. Retailers Rite Aid and Subway have made offers for the retail space, according to Weinstein.
“Our expectations have already been exceeded,” he said.
In our other loft news, CIM Group in early May held a grand-opening party for its Historic Gas Co. Lofts on Flower between Eighth and Ninth streets.
The adaptive-reuse project features 600-square-foot to 1,200-square-foot studios, 1,400-square-foot two-bedroom units and 2,000-square-foot penthouses. Rents range from $1,250 to $3,000 per month.
Amenities, according to the developer, include tiled bathrooms, on site concierge, granite counters and “ultrahip lighting and fixtures.”
The property impressed prolific multifamily housing broker Laurie Lustig Bower, executive vice president of CB Richard Ellis.
“They had some funky floor plans,” Lustig Bower said. “They had some creative ideas. Even the Lobby is kind of wild.”
In another downtown project that requires creativity, Irvone-based R.D. Olson Construction broke ground in April on a two-building, 278-unit Class A apartment complex at 800 N. Alameda St., also known as Union Station.
Construction, according to developers, will be orchestrated to allow for normal activity at the transportation hub.
Bill Welhelm, executive vice president of R.D. Olson Construction, said staging and phasing would allow unfitted public access to the meeting point of Metrorail, Amtrack, MTA, DASH and Metrolink
“The intent is to allow [the public] to continue to use Union Station as if we were not even on the project [site],” Welhelm said.
Developers will create routes during construction for such activities as taxi and bus passenger pickup and drop-off to ensure unimpeded access.
Once completed, the apartment community will feature subterranean parking, a rooftop pool, a bridge over union Station’s service entry and other amenities.
Lincoln Property Co. purchased a lot from Catellus Group. Santa Monica-based GMP Architects designed the $35 million project, which should be completed by summer 2005, according to Welhelm, who has strong expectations for the development.
“It can be a very successful project,” he said.
Another transit-oriented development, Urban Partners’ Wilshire-Vermont Metrorail Station, will include 449 luxury residential units with 20 percent set aside for low-income tenants and 35,000 square feet or retail space.
The development, according to Dan Rosenfeld, principle of Urban Partners, will create “real urban living.”
Rosenfeld said the Koreatown area brings together Asians, African-Americans, Latinos and whites.
“Ours is probably the most diverse in terms of ethnic communities it serves,” he said. “It’s real urban living with no lawns, no gutters.”
Rosenfeld said Los Angeles in the future would have to rely more heavily on public transit.
The project team includes architect Arquitectonica, the Los Angeles County Metropolitan Transportation Authority, equity partner MacFarlane Partners, the California Public Employees’ Retirement System, the local administrator of the Community Redevelopment Agency and the California Debt Limit Allocation Committee.
-e-mail Chris_Tolles@DailyJournal.com
|
Press
Back to Press page
