The first condominium tower in Metropolis, one of the biggest real estate developments in Los Angeles history, officially opens Thursday amid a wave of construction that is crowding the downtown skyline with new tall buildings.
The long-anticipated $1-billion luxury condo-and-hotel complex rising along the Harbor Freeway is one of a handful of mega projects being built by Chinese real estate companies looking to make a splash in Los Angeles and establish themselves as global brands.
Metropolis, which will have three residential high-rises, is being constructed by the U.S. subsidiary of Shanghai-based Greenland along the Harbor Freeway between L.A. Live and downtown’s financial district. The project includes the 18-story Indigo hotel that has been open since April.
The new tower stands 38 stories and has 308 units, 80% of which have been sold or are in escrow, according to Metropolis. Intimate studio units sell for in the upper $600,000 range, and the eight penthouses planned for completion in August are expected to fetch more than $3 million apiece.
U.S. developers would typically space out a big-scale project like Metropolis over several years to make sure the market could gradually absorb the new space, but Greenland moved as fast as it could to try to replicate the speed it is accustomed to building with in China.
The second condo tower of 40 stories is expected to be finished next May, and the third condo tower of 56 stories is set to open in October 2019, said Greenland executive Winston Yan.
At that point Metropolis will be one of the largest mixed-use developments in the West at 3.5 million square feet on 6.33 acres, he said.
“Our specialty is these kind of mixed-use complexes that can include hotel, offices, retail and condos,” Yan said. “We do a lot of these kind of projects in China and other cities around the world.”
Demand is strong at the moment for new condos in downtown L.A., said Erin Kennelly, senior director of research for the Mark Co., a San Francisco real estate marketing company that does not represent Metropolis.
The 25-story Ten50 tower at 1050 S. Grand Ave. and phase one of Metropolis are the first condo buildings to open downtown in several years and are mostly sold out, Kennelly said.
“Now that there is new supply, it is being snapped up quickly,” he said.
Prices are hitting new highs for downtown, with units at Ten50 going for about $900 a square foot and units at Metropolis fetching more than $1,000 a square foot, Kennelly said. Resale condos in the area trade for about $770 a square foot.
“The older units are a little dated,” he said, “and the new ones are better quality.”
Buyers come in three general categories, Kennelly said. The largest is L.A.-area locals. The second is made up of buyers from other parts of the country who are moving to Los Angeles or want a second home here and the third is international buyers, many of whom have some tie to L.A.
Market observers have expressed concern that condos built by Chinese developers will be sold to investors in China who don’t intend to occupy them.
“I think that’s an overblown fear,” Kennelly said. “It’s yet to be seen whether that will come to fruition.”
Many Chinese in the middle and upper classes are looking to the perceived safety of foreign real estate to diversify their wealth, consultants say, and some seek second homes in Los Angeles.
Still, the majority of buyers at Metropolis are from Southern California, sales director Sofia Padilla said. Others have come from Asia, Europe, South America and India.
“Some are empty nesters,” she said. Others work downtown and were tired of commuting and some wanted a downtown pied-a-terre. Buyers even include parents of USC students looking for housing.
Buyers are already moving in, with the opening of the tower expected to be celebrated Thursday evening with a large party hosted by the developer.
The wide flagstone entrance court serving both Indigo and the first Metropolis tower on Francisco Street is an oasis amid a sea of construction barriers and towering cranes transforming the neighborhood into a dense urban center.
The first floor lobby of Metropolis is flanked by still-empty spaces that will become shops or restaurants. Yan pictures a grocery store and perhaps a prestige tech store such as Apple or Tesla. Above the entrance is a 100-foot-wide LED lighting display.
The building has the hallmarks of an upscale residential tower.
The understated but elegant lobby has high ceilings, a floral scent and custom furniture. On the sixth floor is a wide deck intended to let residents experience the outdoor California lifestyle, with a swimming pool, gas barbecues, trees, grass and a space meant for walking dogs. Soothing music is piped throughout the outdoor terrace.
Inside is a well-appointed gym, a screening room and communal spaces where residents can play pool, lounge or entertain friends.
Greenland is only one of several big Chinese players pouring billions of dollars into downtown Los Angeles.
Oceanwide Holdings, based in Beijing, is building a $1-billion mixed-use project on Figueroa Street across from Staples Center that will include a Park Hyatt hotel and more than 500 residences. Sales will commence next year with move-in starting in 2019.
Shenzen Hazens, based in Shenzen, bought land nearby at Figueroa and Olympic Boulevard where it plans to build a $700-million complex with 650 condos and a W hotel.
Chinese developers haven’t announced any billion-dollar marquee projects in L.A. this year in part because the government is trying to reduce the flow of outbound capital at least temporarily, said Chinese investment expert Sara Lo of consulting firm EY.
Over the long term, Chinese investment here will continue to rise, Lo predicted.
“From the companies’ perspective, there is an absolute continued desire to be here,” she said. “L.A. is still one of their top choices.”