Apartment builders woo the wealthy with over-the-top services
During the height of last decade’s housing boom in Los Angeles, developers drew up plans to place luxury condos on top of hotels. The pitch was not only the posh digs, but the hotel services wealthy owners would enjoy without having to leave the comforts of their living room.
Now, some developers are providing over-the-top concierge services to apartment buildings, targeting wealthy renters who want to be pampered but not at the cost of a multimillion-dollar mortgage.
The latest project is from Crescent Heights, a Miami firm that plans to open a long-awaited 40-story luxury apartment tower this summer at the gateway to Century City and Beverly Hills.
In anticipation of an August opening, the firm announced a list of amenities for the 283-unit Century City building that underscores how luxury landlords are increasingly looking to do much more than provide granite counter tops and a spa.
The building, which is not attached to a hotel and is known as Ten Thousand, will have a private theater, on-call personal drivers in luxury cars, on-site personal trainers and an indoor lap pool with an underwater speaker system.
Not enough? The Crescent Heights’ tower is also set to have a butler services, a 24-hour concierge and more than 50 full-time employees who will help get residents’ laundry done, coffee brewed, apartments cleaned and groceries delivered.
Roman Speron, Crescent Heights regional manager for the West Coast, said his company is even working on having a private lounge with full bar for tenants.
“Everything you can get in a hotel, you can get in this building,” Speron said.
A spokesperson for Crescent Heights originally said rents for the two- and three-bedroom units at 10000 Santa Monica Boulevard would start at $8,000 a month, but Speron later said rents have yet to be set.
Regardless of the price, they’ll be expensive and almost certainly unaffordable for the typical renter.
New York developers have been offering apartment projects with such amenities for several years already.
Javier Rivera, a senior vice president with commercial real estate brokerage JLL, said those likely to be attracted to Ten Thousand are international travelers looking for a pied a terre in L.A., celebrities, athletes or simply Century City executives who want the flexibility of renting and a taste of the “celebrity life.”
Rivera said more developers, who he declined to name, are looking at the hotel-like apartment concept for upscale areas, seeing concierge services as a way to charge ever higher rents — especially after the success of shopping center magnate Rick Caruso’s 8500 Burton Way.
That L.A. project, which opened in 2012 near his Grove outdoor mall, offers a house car and driver, saltwater pool and concierges who can secure concert tickets, book vacations and make sure that tenants have their pantries filled with groceries. Burton has proved so popular there is a wait list for the building, where a typical unit rents for about $12,000 a month and a furnished penthouse goes for $40,000.
Caruso said about half of his tenants have their primary residence outside L.A., many making that home abroad. He previously boasted they included the “rich and famous of all categories " — including fashion designers, entertainment industry executives, doctors, celebrities and “heads of state from different parts of the world.”
“What really sets the building apart are the services,” Caruso said this week. “We operate it like a five-star hotel.”
Lee Mintz, a real estate agent with Partners Trust in Beverly Hills, said that before Burton Way, if her L.A. celebrity and athlete clients sought such pampering, they had to turn to one of the hotel-condo projects around town. There they could buy or lease a unit at a new crop of projects conceived during last decade’s housing bubble, such as the Ritz-Carlton Residences at L.A. Live in downtown, the Residences at W Hollywood or the Montage Residences in Beverly Hills.
But now more options are opening up for folks who have lots of money but may not want, or be able to quite afford, such a multimillion-dollar investment. Rents at Burton Way start at $6,300.
“If you can’t afford a $2-million condo and can afford a one-bedroom at $6,000 a month, you [can still] feel like a king or a queen pulling up to the building,” Mintz said.
Caruso himself is doubling down on the concept. He’s planning a similar apartment project down the street at La Cienega and San Vicente boulevards. The project’s size is in flux, but Caruso said rents and services will be similar to Burton Way when the project opens, probably in 2018.
Even on the lower end of the luxury spectrum — say $2,000 for a one-bedroom — developers are rolling out an increasing menu of amenities, such as fitness classes and bike repair stations, desired by millennials and baby boomers alike.
“A lot of today’s lifestyle is about saving time,” said Pete Reeb of John Burns Real Estate Consulting. If developers can provide that — through gyms, coffee bars or concierge services, then “people are willing to pay extra for that.”
At 10000 Santa Monica they’ll be paying a lot.
The project’s location near the border of Century City and Beverly Hills has long been considered premium real estate. It was last occupied by a drab 1970s office building that was home to Jimmy’s, a ritzy restaurant where the political and showbiz elite dined for two decades.
In 2000, Jimmy’s closed and the building was torn down a few years later. A bidding war erupted at the site, with SunCal Cos. of Irvine beating out a bid from presidential candidate Donald Trump. It planned a condo tower, designed by Pritzker Prize-winning French architect Jean Nouvel. But the downturn came and SunCal lost control of the property after filing for Chapter 11 in 2008.
Crescent Heights scooped up the property in 2010 for $59 million — about half what SunCal had paid — and went to work on its apartment tower, this one designed by Handel Architects, a U.S. firm with an international portfolio.
The building is set to welcome the first tenants in August. What the market for ultra luxury rental will be then is unclear.
Major stock indexes have tumbled this year, a decline that hits the wealthy more, since they tend to own more stock. And some economists are warning the U.S. could fall into an recession in the months ahead.
Speron said the company always considers economic downturns in its planning but was building a “luxury product that can stand the test of time.”
“We are trying to take care of everything, the things you need to do everyday” he said, adding that way “people can think about tomorrow.”
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