Thursday, February 12, 2009

Catching up on South Bay residential development projects

I figure the South Bay, specifically the beach cities area, is about 18 months to 2 years behind the rest of California and the nation psychologically in terms of how the real estate crash is progressing. Remember that just a few short years ago we were hearing that prices would never correct more than 10 or 15%. Well we've had that and more. Even now, some are still saying that prices will never crash here. To that I say, "We shall see."

Overall, I still sense denial. I think many are somehow hoping the new pork that's being passed in Washington will somehow trickle down and encourage yet another wave of suckers to buy still-overpriced real estate. And if that happens and we get some kind of price flattening, I expect that any real correction will be delayed another year or two. I've heard stories about how Florida banks holding foreclosures are refusing to cut prices in the hopes of somehow benefiting from pork money. The California state legislature has put off cutting spending because it is holding out for pork.

I am trying to catch up on the state of various development projects. One blog reader alerted me to this September 19, 2008 Daily Breeze story by Kristin Agostoni - "Work likely to resume on RB complex", which I will reproduce here in case the story vanishes. Note the date on the story - that was when the financial markets were embarking on major turmoil, and the full impact had not yet been felt:

Contractors vanished several weeks ago from a partially built senior-housing complex 
in north Redondo Beach, leaving behind a hulking structure covered in scaffolding.

The sluggish real-estate market has led to delays for The Montecito, a 48-unit, 
four-story development of homes and ground-floor retailers at the busy intersection 
of Artesia Boulevard near Green Lane.

Less than two miles away on Ruxton Lane, the same can be said for a nearly finished 
complex of 27 town houses that was put up for auction this week.

The company developing The Montecito, Watt Communities of Santa Monica, expects to 
see construction resume by early next month, ending a work stoppage that began 
roughly six weeks ago, said Webb Parker, the company's vice president of sales and 
marketing.

"We have to offer these homes at lower prices than we've planned on," Parker said 
last week. "We just had to restructure all of our financing on the property.

"We've been delayed. We've been delayed like every other builder, and the market has 
contributed, unfortunately," he said.

The development company says its move-in schedule has been pushed back to March as 
officials renegotiated the financial package with their lender. The units could start 
selling in November or December, he said.

Parker declined to elaborate on the terms of the deal. The lowest-priced condos - one 
bedroom with around 900 square feet - will likely start around $410,000, while a few 
years ago they were expected to sell in the $500,000 range, he said.

The Montecito - which will offer a mix of one- and two-bedroom units, some with dens 
- was approved in 2004 for buyers 55 and up, with the provision that five of the 48 
units are set aside for low- to moderate-income buyers.

"We're kind of excited about it now that we got it worked out," Parker said.

Councilman Steve Diels, whose district includes the structure rising across from the 
north branch library, said he's been told the owners have on-site security and that 
the Fire Department patrols the property.

"My main concern was to make sure it remains safe, because right now it looks like a 
vandalism target," he said.

While The Montecito is back on track, it is unclear what the future holds for the 
27-unit project on Ruxton Lane near the Southern California Edison right-of-way.

Visible from Inglewood Avenue, the Ruxton Pacific complex of Spanish-style town homes 
has wrought-iron fencing, new walkways, grass and young bougainvillea vines. None of 
the units is occupied.

A notice of default was filed in May, records show, and the property was subject to a 
foreclosure sale Monday.

In brief interviews this week, Manhattan Beach developer Steve Legare said he didn't 
attend the auction but was told the property reverted to the lender, Alliance Bank. 
Officials there could not be reached.

The units weren't selling even when the prices dropped, Legare said. A news release 
from March advertises the three-bedroom, 2.5-bathroom homes at $679,000, "a savings 
of up to $70,000 off the original prices," it states.

Ruxton Pacific is "99 percent done," Legare said.

"It was a good project. We just ran out of money. We tried to sell them, and at the 
time they didn't sell." 

"It was a good project but they didn't sell" ?!?? Huh?

Now here is the best I know about these projects.

The Foundry (Torrance)

According to the email notice I got today, there is an open house on February 21. Normally we go to the Farmers Market on Saturday mornings and so we'd be right there for open house, but on that one particular day I may have to go in to work at UCLA for a "radiology retreat." So unless something otherwise changes I am not planning on attending. If that changes I'll say so.

I can tell you that this project seems to have taken forever to complete, with the wood frames exposed to the weather for quite a while. Like other projects I consider it is way too packed in for my taste and I still consider it overpriced.

Cool Homes. Hot Buy.
The Foundry on 2/21.

Dear Susan,

The good times are just getting started at The Foundry in Torrance, where beautiful 
model homes and a gracious courtyard will open for oohs and ahs on Saturday, February 
21st.

Come see an utterly chiconomic collection of hip homes priced from the The Foundry 
Rendering 1 for Weblow $400,000s.  That's right-we're serious- the low $400,000s for 
a new home in a desirable South Bay location. Included designer details- kitchens 
with stainless steel appliances, sleek granite countertops and full tile 
backsplashes. Baths with cool brushed nickel fixtures.  Cabinetry and doors with the 
perfect urban brushed nickel hardware.  Even the interior and exterior light fixtures 
are fun!

A study in style and innovation; all homes have two spacious bedrooms and baths. Some 
homes also include room for an office or guests, and some top-floor homes have a 
dramatic mezzanine and spiral staircase.

Come see for yourself and visit The Foundry Grand Opening on 2/21!

Eric and Kayla
The Foundry Sales Team

360 South Bay (Hawthorne)

Here was the state of things a year ago. At that time there were a few structures on the land that was otherwise left as one big dirt wasteland:

My post from a year ago

And here's an insightful comment a year ago from a beach cities realtor about this awful project:

Insightful commentary

To tell you the truth, I haven't been paying attention to what has been happening to the land, but did notice recently that it looks like some foundations are built. I have no idea how long they've been there. I checked the website and nothing seems to be different.

Villa Allegra (Westchester)

I think these were originally supposed to launch in 2008. The website now says spring of 2009, with prices starting in the $800,000's.

Luxury townhomes right up against Sepulveda Blvd, in Los Angeles Unified School District. I'm sorry,but there is no way I think these can be worth anything near $800,000!

The Montecito

More piles of box condos for the 55+ crowd.

All the website says is "Coming 2009. Pricing not yet available."

I live less than a mile directly north of this development, and it looks like it's been on hold forever.


Ironically, one of the "winners" I see in this South Bay development mess, believe it or not, is the owner of the Hawthorne mall. The Daily Breeze ran a story on February 1, 2009 - "Plans to revive old Hawthorne mall stall" - about how the owners and the Hawthorne city council have been divided for years as to what to do with it. The reason the owners could be "winning", in my opinion (if you could call it that), is because they didn't pour gobs of money into constructing yet more condos right at the real estate peak.


I have been diligently working on updating my properties database. Stay tuned.

3 Comments:

Blogger A said...

gald to see you are still blogging. Wanted to say keep up the good work. I check your blog often and find the unbiased data VERY helpful. You are one of the reasons my wife and I have not bought a house over the last few years and you have saved us a lot of money and headache. Wanted to say thanks.

11:11 AM, February 14, 2009  
Blogger bearmaster said...

A,

You have made my day. Maybe my MONTH.

You have made all the late nights trying to get my data together and caught up worthwhile. THANKS!

11:14 AM, February 14, 2009  
Blogger Richard said...

I second "A"s comment. I moved here 2.5 years ago for work and have not bought a house either, due in part to your insightful posts. I think you are right, Riviera owners especially (and the realtors that service them) somehow think they are still immune. I think this will be the year that the Riviera gets hit...but you never know...bunch of ginzu knife catchers out there as you say. I just wanted to chime in that I am glad you are back blogging and posting...I missed it and it still is very insightful

12:10 PM, February 14, 2009  

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