More loft deflation

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It’s still rough going for developers who overestimated demand for urban condominiums. We’ve written recently about the auctioning of new units in Long Beach and Playa Del Rey.

Now the owners of the Lofts at Hollywood and Vine say they’re ‘not immune to this new market reality’ and are cutting prices ‘over 40% in some cases.’

A 1,200-square-foot unit in the building is now listed for $549,000, for instance, down from an earlier list price of $979,000. Of course, those are list prices, so the original figure isn’t a price someone actually ever paid.

This building opened in 2007 and is still about half-empty, the owners say. It had been the Equitable office building.

A little over a year ago, I wrote this story about overbuilding of lofts in downtown Los Angeles. It drew plenty of complaints from developers and downtown businesspeople. But now it’s become clear there were too many units put onto the market at the time. Some buildings converted to rentals, and vacancies abound at others. But price cuts may now be snaring some buyers.

A couple of months ago, developers of the Evo high rise began cutting prices 15% to 20%. Units in the 24-story tower at 12th and Grand now sell from the mid-$300,000 range into the $800,000 zone, with some seven-figure penthouses.

In March, 2008, the developer of that building told me 85 of the building’s 311 units were under contract. They had very few sales after that, and some cancellations, Bryan De Sena, a spokesman for the project confirmed to me today.

But spring’s price discounts have been moving units. Since March, the building has signed up 70 buyers, bringing the totalunits sold or under contract to about 140, DeSena said.

6/23 update: Rhonda Slavik, director of sales and marketing for Evo’s developer, the South Group, says 155 units are now sold or under contract.

Meanwhile, some of the more celebrated downtown loft projects are finding they’re not immune to the real estate crash after all. A few units in the Biscuit Company lofts and the Eastern Columbia lofts, for instance, are in the foreclosure process, according to ForeclosureRadar, an online seller of default data.

-- Peter Y. Hong