The real estate market is crash landing, right?
Not according to the Fifield Cos.
While other residential developers are scaling back or canceling projects amid a pronounced market slowdown, the Chicago-based firm is pushing ahead with what it says will be the priciest condo project ever to hit the market in Los Angeles County $9 million per unit, on average, and up to $14 million.
Of course, in an industry where location is everything, the proposed 21-story 1200 Club View tower can't be beat. The half-acre Wilshire Boulevard parcel at the corner of Comstock Avenue is adjacent to Beverly Hills and next to the Los Angeles County Club.
The high rise condos on the Wilshire Corridor condo strip generally sell for about $1,000 a square foot, while Fifield is maintaining that its project of no more than 35 units will go for about $2,000 a foot. Some will be less but those at and toward the top will go for more.
"It's a very unique site in terms of the Wilshire corridor. You are looking into Holmby Hills and Beverly Hills and what is unique is, it gave us an opportunity to target a very exclusive home owner," said Tim O'Brien, senior vice president and principal at Fifield. "Based on preliminary interest which is very much a word of mouth campaign we don't see any limitations on value."
Fifield was founded in 1977 by Steven Fifield and focuses on building high-end condo and office towers. The company has done over $4 billion in development and built about 50 buildings. In July it finished up another condo project on Wilshire Boulevard closer to Westwood Village, the 23-story Californian on Wilshire, with all of its 74 units pre-sold.
The Club View project was approved by the Los Angeles City Council on August 8, and the company said it has secured $200 million in financing from Lehman Brothers Inc. and Fremont Savings and Loan. The plan is to break ground this fall with the building open in 2008.
Still, with the housing market slowing down, developers of condo projects elsewhere in Los Angeles are rethinking their plans. Earlier this month, Irvine-based Standard Pacific Corp. backed out of deal to buy a condo project near downtown's Union Station. The 272-unit project, at Alameda Street and Cesar Chavez Avenue, has been converted to a rental property by owner Lincoln Property Co. after failing to attract enough condo buyers. The condo units had been priced near $600,000.
And for the last several months, there's been about a one-third drop in home and condo sales countywide as interest rates rise and buyers await what could be a substantial correction in prices after a boom that has lasted for well over five years.
In Westwood, 21 condos were sold in August a 22 percent drop in volume with the median price down 8 percent to $540,000, according to data provided to the Business Journal by HomeData Corp., a Melville, N.Y. company that tracks housing prices nationwide.
However, Kurt Rappaport, president of the high-end real estate agency Westside Estate Agency Inc., said that the typical buyer at Club View will be the "super wealthy client just coming out of a large estate." Rappaport characterized this sort of client as one who is unaffected by the fluctuations in the market and is buying a condo as a lifestyle choice.
Fifield purchased the half-acre Club View parcel formerly a pumpkin patch three years ago. It is close to Beverly Hills at the extreme easterly end of the condo strip in Westwood.
Club View units will start at around $4 million and max out at around $14 million on the upper floors, pricey even for a corridor where buyers regularly shell out several million dollars for a unit.
Wilshire Realty, a high-end property firm, has been tapped by Fifield to sell units at Club View. Lynn Borland, president of Wilshire Realty, said that there is high demand for the condos already. "I think it corroborates that the ultra luxury end of the market is alive and well," he said.
Each floor of the tower will have no more than two condo units, and between five and seven of the floors will feature a single, penthouse-style unit. Designed by the Keating/Khang Architecture firm, the 163,000-square-foot building will feature heavy use of glass and granite, and a motor court with a floating metal ceiling and a "dignified Parthenon-like space with columns done in a modern architecture style," said principal Richard Keating.
It also will include 24-hour concierge service modeled after a luxury hotel. "It's like being at the Peninsula Beverly Hills hotel in terms of being catered to," O'Brien said.
But in the world of high-end condos, the Club View project, even if it meets all its sales expectations, may not hold its title of the city's most expensive condo project for long.
The planned Montage Hotel in Beverly Hills has been designed with 25 condos at the top of the hotel. Opening in 2009, Rappaport said he expects the condos could sell for $3,000 per square foot, which would set another record.
"I peg the Montage condos above Club View," Rappaport said. "It's unique to have 25 condos on top of the finest hotel in Beverly Hills."
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