At the start of the pandemic, Beverly Hills-based Etco Homes Inc. saw decreased interest in condos. But that has changed as the market has rebounded.
“We experienced a true boomerang effect,” said Bree Long, senior vice president at the company. “In the first few months of the pandemic, nobody wanted anything to do with an attached condo. … We had to get creative with our marketing and get innovative at reaching people with new mediums. … As we turned the corner with Covid-19 and the market started to heat up, we experienced that boomerang effect.
“The last eight to 12 months things have gotten really hot for us,” Long said.
The condo market is not only heating up for Etco Homes but all across Los Angeles. Last year the median condo price in Los Angeles grew a whopping 23%, according to Kitty Wallace, an executive vice president at Colliers International Group Inc. That compares to a rise of 13% for the median price of single-family homes last year, according to Redfin Corp.
And it may make sense for more developers than before to look at condos.
“For the past 10 plus years, when we would underwrite our land deals, we would underwrite them as an apartment deal or a condo project. Sometimes the deal works better as condos but many times, because the rental market was so frothy, the deals worked better as apartment rentals,” Wallace said. “Covid really made a change to that.
When we were underwriting some of the deals … the rental market was getting a little bit softer … the numbers penciled in some of those deals better for for-sale housing.”
The rental market has since heated up again, but Wallace said she is seeing developers interested in condos.
Etco Homes was founded more than 30 years ago. In its early days, the company focused on single-family homes, starting in Orange County and the Inland Empire.
Close to 15 years ago, the company shifted its strategy, building for-sale condominium units and townhomes in infill areas.
Today, the family-owned business has kept that focus, working on high-end properties.
“Philosophically, the company is focused on creating … a lifestyle which offers the comforts of single-family living without losing the conveniences of multifamily living,” Long said.
Currently, the company is selling units at its One Coast development in the Pacific Palisades, The Terraces in Pasadena and The Addison and The Ainsley in West Hollywood.
The last two are part of the Melrose Collection, a group of the company’s projects in West Hollywood. The company is also getting ready to launch at Ato in downtown, Delyla in Beverly Grove and The Alfred in West Hollywood, also part of the Melrose Collection.
Etco Homes is predominantly focused on developing properties on the Westside with recent or current projects in West Hollywood, Beverly Grove and the Pacific Palisades.
“Our founders, Beverly Hills is their backyard, they were born and raised here, and we stick in areas where we’re familiar and have roots,” Long said. “The growth mentality for the company is trying to develop in our own backyard.”
Long called One Coast in Pacific Palisades, which is currently selling Phase II homes, the “crown jewel of our portfolio,” adding that it was “at the apex of luxury and coast living.” The property has 53 oceanfront townhomes and single-level flats ranging from 2,810 to 5,017 square feet.
Mauricio Umansky, chief executive and founder of Beverly Hills-based The Agency, and one of the top agents in Los Angeles, is selling the units.
“It has been an amazing experience working with Etco Homes,” he said. “One Coast overlooks the Pacific Ocean and is a great alternative. It gives a good offering to be near the ocean at a relatively good price.”
But not all of Etco Homes’ projects are on the Westside. The Terraces in Pasadena and The Ato in downtown illustrate its geographic variety.
“We are infill developers and they were great opportunities that we couldn’t pass up,” Long said. “We are interested in exploring submarkets outside (of the Westside) with elements that are perfect for the projects we develop.”
Nick Griffin, executive director of the Downtown Center Business Improvement District, said Ato would be part of a burgeoning condo market in downtown.
“While it’s smaller in scale, the condo market appears to be behaving very similar to the apartment market in DTLA right now in that it experienced a dip during the pandemic and returned very rapidly to pre-Covid levels,” Griffin said. “We had growth of sales that was a 48% increase year-over-year and the increase in price year-over-year was 6.9%. We’re seeing pretty significant activity.”
Griffin said that he expects the increase in sales to also increase the number of developments, like Ato, going into the area.
Long said wellness and security were “top of mind for buyers in a way that I’ve never seen” and something that Etco Homes is addressing in its projects.
She sees technology as increasingly important as well going forward.
And the company, she said, has a lot coming up.
“We have a busy at least 24 months ahead with our existing portfolio and working through it making sure the market sees the virtue of it,” Long said.
“The company will continue to do what it does best which is the development of infill product and is looking at other asset classes as the market changes,” Long said.
But there could be some changes ahead.
While Long said the company was not ready to announce adding other asset types to its portfolio, the company’s “leadership is very open-minded to other opportunities and it depends on what is going to make sense for the immediate and long term future.”