With penthouses, downtown Los Angeles might be moving on up
The units meant to lure the wealthy could be the key to continued revitalization. There is competition with towers to the west, but lower prices in the city center might work to its advantage.
By Cara Mia DiMassa
Los Angeles Times Staff Writer
July 26, 2008
They sit atop downtown buildings like beacons: Marble bathrooms glistening, glass wrap-around patios gazing out on the city and high-end ranges awaiting their first speck of gourmet food.
The penthouses that crown many of downtown's high-rise condos and lofts were conceived in a different era, during the last real estate boom when the sky seemed the limit, even on the gritty streets of the city center.
While most downtown dwellings are decidedly more modest, the penthouses have gotten the attention -- with magazine spreads and rumors of Hollywood stars moving in.
But with the real estate downturn, developers are figuring out how to market the gems -- and using them to bolster the perception that downtown is becoming a high-end residential destination.
Because some of the new developments on the horizon -- notably the Frank Gehry-designed Grand Avenue project and the Ritz-Carlton Residences at L.A. Live -- are aimed at wealthy buyers, with all or almost all of their units priced above $1 million, the fate of downtown's penthouses is of particular importance.
Downtown boosters have seen attracting more wealthy residents as a key next step in the area's revitalization, because they hope that would attract some of the high-end retail that up until now has largely been missing.
But downtown faces some hefty competition to the west.
Right now, the center of ultra-luxury high-rise living stretches from Beverly Hills and Century City through Westwood, where several opulent buildings are already rising or in the planning stages, including the Century tower in Century City, where Candy Spelling purchased a $47-million penthouse.
It remains unclear how much of that demographic the decidedly grittier downtown area can grab. While downtown is farther from Spago, Sunset Strip, Montana Avenue and Rodeo Drive, prices for penthouses are generally much lower than in the best Westside towers. And some say that is making a difference.
"The two really hot areas are Century City and downtown in terms of the ultra-luxury segment," said Jim Perabo of Condosource.com, a portal for condo sales and rentals.
The downtown penthouses also serve another important purpose: providing aspiration for entry-level downtown condo buyers.
"Ultimately, developers are trying to sell the rest of the units," said Gil Seraf of the 213 Loft Company, a real estate firm in downtown Los Angeles. The penthouses "are always good P.R."
Although it's impossible to guess exactly how many downtown penthouses there are, most new buildings are including between five and 10 of the luxe units, which typically start at about $1 million and boast more expansive space and upgraded amenities than their more modest cousins.
The rest of the story at the above link goes into more detail about how the strong market for the most expensive units in Downtown is an indicator of the future Downtown market.
The only thing the article misses are the staggering numbers being racked up by the best units at the Ritz-Carlton (which everyone who is anyone Downtown knows - unofficially - but which I guess are not considered newsworthy by the LAT until the building is completed and they close). But with the present rate of sales - even with increasing per square foot prices - it should be sold out by completion - which bodes very well for the Grand Avenue project's condos.