Pasadena Luxury Apartments Underway
Pasadena’s apartment boom got another boost last week when construction began on the Trio, a 304-unit luxury complex that will fill most of a block on Colorado Boulevard in the city’s Playhouse District.
The $70-million development is a joint venture of Shea Properties, based in Aliso Viejo, and Capital & Counties U.S.A. Inc., a San Francisco real estate investment firm. Their four-story Trio complex will include street-level retail space for a restaurant and a few shops.
Shea Properties is a subsidiary of J.F. Shea Co., which also owns Shea Homes, one of the nation’s largest homebuilders. Shea Homes, the chief development consultant to the Worldwide Church of God, plans to build housing at the church’s 48-acre Ambassador College site in Pasadena.
As for Shea Properties, it will concentrate on mixed-use projects in urban neighborhoods like the Trio, said President Bill Gaboury.
“We think infill apartments with ground-floor retail is the wave of the future,” he said. “Cities love this stuff.”
Such designs also are in vogue among urban planners, who like getting stores on the sidewalk and residents to patronize them at the same time. Pasadena’s most prominent example of the mixed-use style is Paseo Colorado, where 391 units sit atop a 565,000-square-foot mall.
The Trio is being built on 3.8 acres bordered by East Colorado Boulevard, North Madison Avenue, Union Street and El Molino Avenue. Also on the site are two historic structures, including the eight-story First Trust Bank building and a parking garage. Both date to the 1920s and will be preserved.
The bank building will continue to function as an office, and the parking structure, designated a historic landmark in 1994 for its contributions to the Playhouse District, will become the Trio’s leasing office and community center.
The project was named Trio, Gaboury said, because it will have three faces: an urban design on Colorado, a more residential-looking Spanish theme on El Molino and a contemporary design on the remaining sides as a transition between those two concepts.
A few units will be designated for low-income tenants, Gaboury said, but most will rent for about $2.25 a square foot for floor plans ranging from 900 square feet to 1,300 square feet.
Trio will open in 2005. Gaboury said he hoped by that time the recent glut of new units will have been absorbed. “You can’t overbuild apartments in Pasadena,” he said.
Other developers seem to agree. Nearly 2,000 housing units have been built recently or are under construction, and hundreds more are being planned, according to city estimates.
The new development translates into nearly 4,000 additional residents for the city of about 133,000 and puts Pasadena at the vanguard of communities -- ranging from giant Los Angeles to tiny Brea -- that are encouraging housing in their commercial cores.
The growth comes after a slow period in the 1990s, when only about 1,000 units were built, said Richard Bruckner, the city’s director of planning and development.
Several factors have made the area attractive to apartment investors, Bruckner said, including a large population forming new households and looking for urban amenities such as restaurants, museums and, particularly in Pasadena, a commuter rail line -- something the new Gold Line provides.
But the building boom is a worry for apartment broker Kevin Hurley of Marcus & Millichap, whose firm estimates that the average vacancy for top-quality apartments in Pasadena rose to 11.4% in the second quarter from 7.4% in the same period a year earlier. Average rent rose about $100 to $1,955 a month.
Landlords are having to offer concessions such as reduced rent to bring in tenants, said Hurley, who said this could portend financial problems for owners if the economy gets worse.
“They’re luxury apartments because when times are good, people have the luxury to live in them,” Hurley said.
Investors who want a piece of the Pasadena apartment market, however, are undaunted by rising vacancy rates and increased competition for tenants, he said.
Apartment buildings “are still trading at large numbers on a cost-per-unit basis, and it doesn’t seem like it’s slowing down,” Hurley said. “Prices still seem to be going up.”
Paseo Colorado’s apartments sold for about $250,000 a unit in June, perhaps the top price in Pasadena since the Alexan CityPlace apartments sold for $264,000 a unit last year.
