DOWNTOWN — Sales of the Americana at Brand’s Excelsior condominiums have steadily grown since owner Caruso Affiliated dropped unit prices by as much as 40% this summer, with more than half of the project now sold, company officials said this week.
Fifteen of the 100 units were sold before Caruso Affiliated launched an aggressive ad campaign in May, plastering banners on the walls of the Americana that promoted condos as “priced below cost.”
Some units sold at a discount of more than $100,000, executives said.
Now, with 55 units sold, Excelsior residents will be able to start moving in this week.
Federal restrictions had prevented the move-ins before the project was at least 50% sold, said Paul Kurzawa, executive vice president for operations for Caruso Affiliated.
Kurzawa hoped that the ability to move into escrow immediately would inspire more buyers to pursue units at the Excelsior, he said.
“The biggest difference now is that buyers have the opportunity to get some instant gratification,” he said.
The move-ins will also bring life to two condominium towers that had been empty for nearly two years.
“Having activity in the building, having lights on, obviously that’s going to have a positive effect,” Kurzawa said.
But the slow pace of increased sales at the Americana’s premium residences was not necessarily an encouraging sign, said Robert Bridges, professor of real estate finance at the USC Marshall School of Business.
“The fact that [developer] Rick Caruso’s project has had problems is indicative of the real depth of problems in that market,” Bridges said.
“His project should have been a quick seller in the housing market because of the desirability of his units.”
More condominium towers are under construction in nearby areas like downtown Los Angeles, which could put further downward pressure on overall prices because many new properties are having trouble drawing buyers at rates that have proven to be much higher than what market conditions have dictated, experts said.
“There is no guarantee that prices are not going to drop further,” Bridges said.
Vacancy rates of about 10% used to be a signal of stability in similar developments, “so 45% vacant is not indicative of health,” he said.
Still, the Americana’s condos have sold at a steady average of about six units a month, with that trend continuing into the typically slow holiday season, sales manager Erin O’Connor said.
Five of the 15 total floor plans have sold out, although others remain between 1,300 square feet to 2,632 square feet, O’Connor said.
Although many units have been priced below the total cost of their construction, the firm will maintain the low prices, O’Connor said.
Those deals will include a subsidized monthly homeowners association fee, she said.
The normal association dues averages about $870 a month for services that include valet parking, room service from restaurants on the property and a gym and spa.
But units are being offered with a 50% discount on the fees for up to two years, she said.