Grand Ave. Gets Big Bucks: Foreclosed Condos Don’t

The money-plagued Grand Avenue project in downtown LA, across from the Disney Concert Hall, just got a Korean fairy godmother…with $100 million dollars. The LA Times reports that the Honua Group will drop the cash into the project’s long-awaited first phase. As the real estate market has continued its downward slide, the project’s developers have had a hard time coming up with investors- despite another $100 million it received from Dubai’s royal family.

The project has been described as LA’s “most ambitious effort to create dense, high-rise residential developments next to rail lines, offices, cultural attractions and shopping.” The Times article describes it this way:

The $2-billion Grand Avenue plan, designed in part by Frank Gehry, calls for building shops, condo towers and a boutique hotel — as well as a civic park — on city and county land near the Walt Disney Concert Hall.

It’s definitely ambitious, but I really question more condos downtown right now. Clearly the current investors are taking a long-term view, but prices downtown have dropped so drastically and there is so much inventory on the market, I think it’s going to take a long time for values to climb back up. Especially since banks seem to be getting aggressive in this area with unloading their foreclosures. There are a lot of properties selling at a loss. But projects like this could be good for the overall picture, making the area more desirable. Still….glad it’s not my $100 million.

Here’s a few examples of bank-owned properties:

• Here’s a bank-owned unit in the Skyline on W. 9th for $360,500. It’s last sale price is listed in May 2007 for $434,788. There are about a half-dozen units for sale in the building, just from the listings I see.
• Another bank-owned unit going for $218,500 over on W. 5th. The price has been dropped from $230,000, and it sold in July 2006 for $460,000, then looks like the bank took it back in April 2008 for $357,256.
• And here’s one in the Little Tokyo Lofts for $239,000. It’s down from $249,000. It’s last sale was November 2006 for $400,000, then looks like the bank took it back in Feb. 2008 for $303,750.