LOS ANGELES, CA - The strain of recession is being felt in the downtown Los Angeles area home to the "L.A. Live" entertainment center, where trendy condos and apartment buildings have sprung up as of late. Vacancy rates at the upscale rental projects have skyrocketed, and new condo units arriving on the sales market are unable to find buyers who can access credit.
The area has seen about 5,400 rental move-outs in the last year. Dolores Conway, director of USC's Camden Real Estate Economics Forecast, said the occupancy rate had been 98.7 percent 15 months ago, and 96 percent three months ago. Now, it has dropped down to just 85 percent, which is "very low," according to Conway.
Now, some of these projects are being converted from condos for sale to apartments for rent. The redeveloper of the Brockman Building, a 12-story architectural wonder that was being converted to condos in a $35 million makeover, has decided to rent out the units instead of selling them at $1.2 million and up.
"With the liquidity markets where they are, trying to sell units is not beneficial, said Norman Salter, the chairman of West Millennium Group. "For this rental market, they should be a hot item because we''ve got condo specs and this is an above-average unit for a renter."
Other landmark buildings in the central business district - including Chapman Flats and Union Lofts - have been refurbished into condos, put on the market just as the economy tanked and then repurposed as luxury rentals.
Source: ktla.com