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China Daily (Hong Kong) - - COVER STORY -

er with 514 con­dos and an­other 56-story tower with 685 con­dos un­der con­struc­tion. The two build­ings are slated to open in 2018 and 2019 re­spec­tively.

“I think Green­land USA’s Metropo­lis is tak­ing a lead­ing role in the de­vel­op­ment in the down­town area,” said Hu Gang, pres­i­dent and CEO of Green­land USA, a sub­sidiary of the Chi­nese real es­tate gi­ant Green­land Group. “Now we are tak­ing the lead­er­ship of the mar­ket, also, and we are cre­at­ing the mar­ket as well.”

Ocean­wide Plaza, an­other high rise com­plex, and Shen­zhen Hazens’ pro­posed $700 mil­lion mixed-use pro­ject, along with the Metropo­lis, are re­ported to be the largest projects un­der con­struc­tion in down­town Los An­ge­les.

Only sev­eral min­utes’ walk from the Metropo­lis is Ocean­wide Plaza, an­other $1 bil­lion mixed-use pro­ject by China Ocean­wide, a pri­vately owned in­vest­ment com­pany.

A 50-story Park Hy­att ho­tel with 184 rooms, and two 40-story tow­ers with 504 con­dos is be­ing built on the nearly 1.86 hectares. Upon com­ple­tion in early 2019, the pro­ject will fea­ture a 700-foot rib­bon-shaped LED sig­nage, which is ex­pected to be the largest LED screen on the West Coast.

When Thomas Feng, CEO and pres­i­dent of Ocean­wide Plaza, ar­rived in Los An­ge­les in 2013, it was not a “hot des­ti­na­tion” in most peo­ple’s eyes. “Not many peo­ple were aware of the re­nais­sance at that time,” he said.

The re­nais­sance also was a re­sult of the change in in­dus­trial and fam­ily struc­ture, Feng said. “After man­u­fac­tur­ing started fad­ing in the 1990s, the life­style of big fam­i­lies liv­ing in a big house had changed, and the younger gen­er­a­tion be­came the ma­jor­ity in the work­force, es­pe­cially on the West and East coasts,” he said.

Ac­cord­ing to a 2015 re­port by Bea­con Eco­nom­ics for the Cen­tral City As­so­ci­a­tion of Los An­ge­les and the Down­town Cen­ter Busi­ness Im­prove­ment Dis­trict of Los An­ge­les, the de­mand for apart­ments in down­town Los An­ge­les tripled from 2000 to 2013.

Now there are 5,636 con­dos, and more than 5,000 are un­der con­struc­tion, most of them in­vested in by Chi­nese. Who is buy­ing the con­dos? “New res­i­dents help drive the down­town re­nais­sance, and we are clear about the de­mand, which is mixed-use build­ings,” said Feng.

He also said that more young peo­ple, es­pe­cially the mil­len­nium gen­er­a­tion, want to live in down­town Los An­ge­les to avoid com­mut­ing and have more time for en­ter­tain­ment and be­ing on the in­ter­net.

Res­i­den­tial Tower I of the Metropo­lis has been 80 per­cent sold and the price of the con­dos range from $600,000 to more than $2 mil­lion, ac­cord­ing to Wu Chao, Los An­ge­les gen­eral man­ager of Green­land USA.

He ex­pects even higher prices for the other two tow­ers that tar­get a more up­scale mar­ket.

Los An­ge­les has been a tight hous­ing mar­ket for a long time. Over the last 20-30 years, there hasn’t been enough build­ing of hous­ing units to sup­port the growth in pop­u­la­tion and de­mand, which is why hous­ing prices in­creased over the last decade, said Che­ung.

The re­ces­sion in 2008 also played a role. There was a lot of de­vel­op­ment to the east and north of Los An­ge­les then, but “a lot of the mar­ket crashed” when the re­ces­sion oc­curred, said An­der­son. “In the last 10 years, it re­ally changed. I think peo­ple started com­ing be­cause of the value they saw cre­ated by the re­ces­sion,” he said.

Chi­nese in­vestors started com­ing to Los An­ge­les after the fi­nan­cial cri­sis, around 2010, said An­drew Pan, se­nior vice-pres­i­dent and head of Chi­nese busi­ness and strat­egy at East West Bank.

“When China’s real es­tate mar- ket cooled down, ma­jor Chi­nese devel­op­ers had to find a mar­ket to keep their ca­pac­i­ties go­ing, and the US devel­op­ers were still re­cov­er­ing from the cri­sis,” said Pan, who has worked in down­town Los An­ge­les for more than 10 years and watched the changes.

First stop

Los An­ge­les was the Chi­nese in­vestors’ first stop be­cause it’s a gate­way city, and the down­town is the clos­est metropoli­tan area to China, he said, adding that the area was at­trac­tive for devel­op­ers be­cause of rel­a­tively low con­struc­tion costs and more rea­son­able prop­erty prices.

In Man­hat­tan, a condo can cost more than $1,500 per square foot and in San Fran­cisco more than $12,000 per square foot, but in Los An­ge­les the av­er­age condo cost is $700 per square foot.

The Los An­ge­les city gov­ern­ment has been ag­gres­sively at­tract­ing for­eign di­rect in­vest­ment, es­pe­cially in the real es­tate in­dus­try for its down­town re­nais­sance plan.

“I trav­eled with Los An­ge­les Mayor Eric Garcetti to China on a trade mis­sion years ago. The mayor said the sky­line of all the Chi­nese cities vis­ited — Bei­jing, Shang­hai, Hong Kong — were so beau­ti­ful. The lights and con­tem­po­rary de­signs were un­be­liev­able.

He said, ‘I want to change the Los An­ge­les sky­line,’ ” re­called Pan.

Then the gov­ern­ment pro­moted real es­tate de­vel­op­ment, and came up with the in­no­va­tive “par­al­lel per­mit process”, al­low­ing devel­op­ers to start con­struc­tion be­fore go­ing through the en­tire process, which usu­ally takes two to three years.

“Now it takes only a year or a year and a half. By sav­ing a lot of time, you can con­trol the cost,” said Pan.

A pro­posal for a 28-story mixe­duse tower by Li­fan Group, a ma­jor Chi­nese man­u­fac­turer of au­to­mo­biles and mo­tor­cy­cles, was fi led early this year, and the com­pany ex­pects to fin­ish per­mit pro­ce­dures by the end of this year. By April, the de­mo­li­tion work on the 1-acre site had been com­pleted.

“There’s been a chal­lenge for Chi­nese devel­op­ers to nav­i­gate US rules and reg­u­la­tions, but it’s been an ed­u­ca­tion,” said Wil­liam Wang, vice pres­i­dent of Li­fan USA Real Es­tate, Inc, a sub­sidiary of Li­fan Group.

The Li­fan Tower will have 305 res­i­den­tial units and 15 per­cent will be low-in­come res­i­dences. “We were not fa­mil­iar with that (low-in­come res­i­dence). After talks with the city,

PHO­TOS BY LIA ZHU / CHINA DAILY

Down­town Los An­ge­les

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