Who will live in the super luxe Metropolis condos?
Looking beyond the nouveau riche of the West Coast, the Chinese developer behind a massive Downtown Los Angeles development is now looking to New York for potential condo buyers.
Greenland USA, whose billion-dollar Metropolis project is the biggest development under construction in Los Angeles, has recently filed a request to market 51 Phase II condos to buyers and investors in the Big Apple.
Once both phases are complete in 2018, Metropolis will have three condo towers with 1,500 condo units in total and a 18-story boutique hotel, as well as plenty of retail space.
In New York, out-of-state developers must apply with the Attorney General’s office to solicit buyers. But given high demand for condos in L.A., specifically marketing outside of La La Land is an atypical move among developers.
“Unless you have a condo with prohibitively bad things going on, it will go incredibly quick,” Nourmand & Associates’ Gavin Fleminger told The Real Deal. “A brand new unit will typically go into escrow within one week on the market and will close within the month 99 percent of the time.”
But in the case of Metropolis, Fleminger added, its Downtown locale makes it a unique product compared to other L.A. condos, the bulk of which are located in Westside and Hollywood.
“Targeting New Yorkers is a smart move [for Greenland], because if New Yorkers move to L.A., they’d be much more comfortable in the downtown, urban setting,” he said.
DTLA is also different from other markets because a massive amount of housing is hitting the market in the next two years, leading some analysts to suspect the area could become oversupplied by luxury rental units.
But if that has an effect on the condo market, it will be further down the line. Lately, in DTLA, newly constructed condos have gone quick.
Metropolis itself sold 65 percent of its Phase I condos well before construction wrapped up, Curbed reported late last year, and 78 of the first Phase II tower’s 520 units are already in contract, according to a condo market report by Polaris Pacific.
Rhonda Slavik, the real estate consulting firm’s director of business development, told TRD that the units at TEN50, a fellow DTLA luxury condo project at 1050 South Grand Avenue, were snatched up almost immediately upon hitting the market.
“We sold 50 units in the first weeks of being open. There’s very strong local demand, very robust traffic and very robust sales,” she said. “DTLA has been deprived of inventory for years now, and new inventory is highly desired.”
A significant portion of Metropolis buyers so far have not been L.A. residents.
A strong fraction of the Phase I condo buyers are Chinese investors, most of whom paid in all-cash, KPCC reported late last year, casting doubt on the volume of native foot traffic within the development once it’s complete.
Even as Greenland looks to the East Coast, takers are likely to be the corporate executive types that wouldn’t live there full-time, Fleminger explained.
“When you compare it with properties located on the Westside, I would say that it’d probably underperform,” he said. “For the most part, even L.A. people who work downtown prefer to live west of it.”
Greenland did not respond to multiple requests for comment.