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.
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,
Downtown Los Angeles