Developers: Are They Over Doing It?

Just recently have I entered the blogosphere, but what I have found on real estate development has truly kept me intrigued. There is so much always happening in this field that it makes it enjoyable to search through blogs that offer up interesting insight on what is currently going on and soon to be underway. In my last post I talked about how the city has decided not to allow for the rezoning of industrial land for residential use. So I thought it was only fitting to talk about two projects in the Los Angeles area for residential use that have been under some debate lately. The first post "Westside Condo Project Promises More Gridlock, Disparity," is published by RedFin Los Angeles real estate agent Cindy Allen. Her post brings up the issue of plugging in more high rise luxurious condos in Century City and whether the market can withstand these super expensive buildings. The Second post "Conquest Banned For Even Thinking About USC Housing," was published by Dakota Smith the editor of Curbed LA. In this post she talks about the ruling by the courts to not allow Conquest housing to monopolize housing around the USC campus and allow for the University Gateway Project to move forward (a Conquest advertisement to the left). As one can see, there are projects going up all over Los Angeles meeting different types of needs for living, but there is always debate and issues revolving around every development. In the first post there will be additional talk about whether the market will continue to slow down. Where as in the second post, questions have been addressed about monopolizing the market so that other developers are unable to come into the area. Both are very prevalent issues and interlocking in many cases. I have offered my comments on each of these blogs below, as well as on the individual's blog.

"Westside Condo Project Promises More Gridlock, Disparity"
Comment:
First off, I would like to thank you for your interesting insight on this proposed project in Century City. As you stated, a 45-story 177-unit building in Century City that has been designed by French architect Jean Nouvel does not seem like the best option at this time (the shiny inserted building at the right). In my opinion, with slumping markets and the already over priced homes in Beverly Hills, I do not feel that "one of the most expensive residential buildings in the west" makes sense. The developers claim it will attract the European and Asian elite along with the rich Westside mansion owners to sell and move into a one of a kind building. Yes, maybe you will get a few ultra rich people to give up their mansions to live in a prestigious 30 million dollar condo, but I would not push the envelope. I agree with your assessment that this could potentially over build the market for the need of high end condos. Especially with the other nearby proposed projects of a 252-condo development on Wilshire Boulevard in Beverly Hills and the other two projects that make up almost 800-condos in Century City that have been proposed. With the amount these investors have paid for the land which seems to be between 400 and 500 million for each site, what will happen if they cannot find enough people to buy the condos? This could potentially add to the already huge problem with the market, creating a lot of losses. Do you see all these projects going forward in the near future or do you feel some of the investors will realize that there is just not enough market for these types of huge condo buildings at this time? I am all for development and luxurious condos but right now it seems like this could be a bad move on the developers part to believe that he can fill 30 million dollar condos with such an ease. Like you have suggested, I guess time will only tell.

"Conquest Banned For Even Thinking about USC Housing"
Comment:
Being a student at USC, I would like to thank you for your knowledge on the issue surrounding USC housing and Conquest. You have made it apparent to me that Conquest housing will no longer be able to hold a monopoly on current limited market of housing around the USC campus. As you state "A settlement reached today permanently prohibits Conquest Student Housing from interfering with housing projects near USC". This is a very big deal because the prices for apartments around USC are pretty absurd to have to be paying as a poor college student. As a student, I am paying 1,200 dollars a month not including gas or electricity. Allowing for these other projects to come into the areas, such as the Urban Partners project with USC to build the University Gateway, will help lower surrounding prices of apartments. It has not been a secret that Conquest has kind of taken over and kept other developers from being able to enter the area. You have made it clear that all law suits have been dropped by both sides, but if Conquest makes any missteps the Court has the power to impose sanctions. I was not aware that the Gateway Project is going to house 1,600 students and now I understand why Conquest was trying to interfere and litigate the development. Do you think that Conquest will continue to try and use unlawful actions to stop other developments from coming in or do you think that they will allow for things to take their course? It is understandable that they want to keep profit margin high, but to abuse the power is just not right. Along with that, do you think that prices for rent of apartments will change for the better or worse with the development of new buildings? Hopefully, as you state, the Gateway project is the first of many projects to help revitalize the area surrounding the USC campus.