Southern California's brutal real estate recession proved a humbling and costly experience for the Westside of Los Angeles, home to some of the area's most costly and prestigious pieces of property.
Beverly Hills mansions lost half their value. High-rise office space went begging in Century City. Marina del Rey commercial developments were scrapped.
But the Westside has regained some of its lost luster, with home prices posting impressive gains and office vacancy rates dipping to among the lowest in the region.
The median price of all Westside homes sold through Dec. 5 stood at $343,500, a sharp 10.8% increase from the same period last year, according to DataQuick Information Systems, a La Jolla-based real estate research firm. Home values for the rest of Southern California remained relatively flat.
Growing demand and a tight inventory of available homes has frustrated many buyers, said Linda Semon, a Fred Sands real estate agent in Santa Monica. She had one buyer who was outbid on four homes before buying a Santa Monica townhouse in the $400,000 range.
"This is the best year I've had," said Semon, whose 1996 sales volume is up 20% over last year.
Beverly Hills agent Joe Babajian sold a house for about $6.5 million--$2 million more than what it fetched only last year. However, Babajian and other agents note that prices are still far below their peaks of the late 1980s and that today's buyers--unlike in the boom years--are selective.
The market will see "slow appreciation and gradual improvement through the end of the decade," Babajian said.
The commercial side of the Westside real estate market has also seen a noticeable improvement in rents, property values and investor interest.
When Prudential Insurance Co. put its landmark Century Plaza Towers up for sale in late 1995, several rival bidders appeared with offers in the $500-million range. Investment banker J.P. Morgan and a group of pension funds emerged with a winning bid of $480 million for the twin 44-story skyscrapers and adjoining ABC Entertainment Center, according to sources. "In 1996, we saw a tremendous increase in acquisitions across the Westside," said broker Nick Christensen at the real estate firm CB Commercial. Some Brentwood office buildings along Wilshire Boulevard sold this year for an estimated $185 a square foot, up from a low of $100 reached in 1994, he said.
Douglas Emmett, a Westwood real estate investment firm, has purchased three major Westside office buildings in the last year, including MGM Plaza, a million-square-foot office complex in Santa Monica that was recently bought for $220 million.
The Westside market has benefited from the relocation and expansion of many entertainment-related companies such as MTV, which is relocating its West Coast headquarters to about 50,000 square feet of space in Santa Monica.
The lack of new building and the presence of expanding tenants have driven vacancy rates to some of the lowest in the region. For third-quarter 1996, the Westside office vacancy rate stood at 13.4%, compared with 17.9% for the Los Angeles area in general, according to CB Commercial/Torto Wheaton Research.
Times staff writer Jesus Sanchez can be reached via e-mail at email@example.com or by fax at (213) 237-7837.
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Westside home prices have recovered somewhat after a steep fall. Median sales price, in thousands of dollars:
* Through Dec. 5
Source: DataQuick Information Services