Saturday, September 09, 2006

L.A. Times: Standard Pacific Homes Abandons Downtown L.A. Condo Deal

Is this the shape of things to come? We already know from a previous blog entry that downtown is suffering from a glut of condos. Now, according to this September 6 story by Annette Haddad, Standard Pacific Homes, perhaps wisely, has given up on a downtown condo project deal.

The condo project, owned by Lincoln Property of Dallas, will change direction and the condos will be converted to apartments. The $600K+ asking prices failed to attract enough buyers in the 272 unit project, by Union Station. The project had actually started out as an apartment project in early 2005, but Standard Pacific made a deal with Lincoln to sell the units as condos instead. Now the company has changed its mind. Deals that made sense over a year ago "no longer make business sense."

Developers have added nearly 6900 condos and lofts to downtown in the last five years, and 5600 are scheduled to be built over the next two years. Los Angeles area economist Jack Kyser suggests that perhaps downtown "has gotten a little ahead of itself."

Not all downtown condo projects are fairing poorly. Some developers carefully presold their units. Million dollar penthouse units by another developer that have been withheld from the market now have waiting lists.

It'll be interesting to see if we continue to see a "back to apartments" movement develop, given the condo glut. That would probably at least be step closer to sanity and a greater supply of relatively affordable housing, at least.


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