California has been one of the real estate bubbles’ biggest casualties, but that isn’t stopping one big time real estate executive from unveiling plans for downtown Los Angeles’ first new high rise in twenty years. The development has yet to acquire the necessary financing, though, so there is still a good chance that the ambitious project could be grounded before it even starts. For more on this, read the following article from Property Wire.
The first new downtown property development in Los Angeles to be announced since the credit crisis is being hailed as a sign that the city is on the cusp of real estate resurgence.
Plans by Thomas Property Group to build an 80 story $1 billion high-rise office and hotel complex have created a lot of optimism in the property industry.
The glass-walled building with a slanted profile resembling a ship’s sail includes a 40 story hotel and condo tower and an 18,000 square foot public park that would replace the 50 year old Wilshire Grand hotel.
Company Chairman and Chief Executive James Thomas claimed it would be the city’s first major office high rise in some 20 years. He said he is confident that demand will be there for business real estate as the downtown area grows after the recession.
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"There is no place that has the amenities, the attractions that downtown Los Angeles has," he said.
The news offers a glimmer of optimism for a downtown re-birth that has suffered in the slumping economy. Major development have stalled, developers have declared bankruptcy and condo prices have plunged.
Other bright spots include small businesses cropping up in the area’s forgotten storefronts and renewed condo sales in downtown lofts.
"I think downtown Los Angeles is going to do quite well when this economy recovers," said Christopher Leinberger, a land use strategist and visiting fellow at the Brookings Institution think tank in Washington.
In recent times dozens of downtown projects have never broken ground including Frank Gehry’s $3 billion Grand Avenue housing and retail project and the 76 story Park 5th condo complex, which was billed as the tallest residential structure in the West.
Average prices for new homes have plummeted 21 percent and the recession has forced a growing number of landowners and developers into bankruptcy, including downtown’s largest landlord, Meruelo Maddux Properties.
Thomas said the company has completed preliminary designs and is preparing to file plans with the city. Thomas Properties and partners Korean Air, plan to seek financing from lenders and investors on both sides of the Pacific and begin construction in 2011.
He expects credit markets to thaw by the time the partners seek construction loans. "Construction costs are down, material costs are down. It’s ideal to be placing yourself to be ready to ride the wave when the recession turns and the economy moves up," added a confident Thomas.
This article has been reposted from Property Wire. View the article on Property Wire’s international real estate news website here.