Conversion Tactics

  • California Real Estate Journal
  • October 24, 2005
  • Julie Leupold

One of the largest downtown Los Angeles deliveries commands near-record area prices, helps office market

If you stand in the corner of a triangular unit in the window-laden 1100 Wilshire, where the occupancy date has been pushed from this fall to first quarter 2006, you can see from the coasts to eastern Los Angeles County. But just that swatch of flooring big enough for your feet will cost more than $1,000.

One of the latest condominium-conversion projects in downtown Los Angeles is commanding more that $1,000 per square foot for premium units months before delivery, with the price increasing with its popularity. Although the marketing staff is reluctant to put an exact price tag on the units, of which half are sold, with a waiting list of pre-qualified buyers, the average cost for spaces excluding the penthouse, townhouses or units with a terrace sits around $700.

While it outprices most other conversion projects in California, 1100 Wilshire is seen by some as setting a new standard in pricing points for noncoastal condominiums, as hungry buyers gobble up anything put on the table.

“Demand is outstripping supply by quite a wide margin,” said Delores Conway, director of Casden Real Estate Economics Forecast for the USC Lusk Center of Real Estate. “Coasts are starting to recede, and growth is coming in the middle part of the state,” with prices going up and vacancies decreasing.

The iconic property was constructed as a luxury office building by a wealthy Taiwanese developer following feng shui principles. The building sat mainly vacant, with a neglible10 percent occupancy, over 16 years on the outskirts of a burgeoning downtown.

The all-glass building is designed as a triangle that will be carved into 230 units sitting on top of a traditional square, 700-space parking garage, according to Bob Barber, sales manager for 1100 Wilshire. It is slated for a completed move-in by summer 2006.

The early demand for the units has far exceeded the supply and even blown the existing statistics of interested Los Angeles buyers. For the lofts that are being delivered downtown, 6,000 names are submitted for units, and 40 percent of those applicants qualify, according to anecdotal evidence from downtown owners – with 1100 Wilshire registering even higher.