Luxury Condominium Developer Wants to Take L.A. Higher

After building condominium towers in Miami, Atlanta and other U.S. cities, developer Bruce A. Menin has arrived in Los Angeles to preach the gospel of high-rise luxury living.

“I provide people a place to stay with a view,” said Menin, principal of Crescent Heights of America. “They want a [carefree] lifestyle and the security of a doorman. They just don’t want to deal with the upkeep of a house.”

Menin’s belief in high-rise residences will soon be put to the test in what he describes as the “uniquely horizontal” L.A. region.

In Marina del Rey, Crescent Heights is constructing a 20-story condominium building called Regatta--one of the few high-rise condominium projects to break ground in Southern California this decade. The Beverly Hills-based company, which had done little development in the region during the last decade, also plans to start building a 20-story condominium tower on Wilshire Boulevard in Westwood later this year.

There should be a market for such condos, real estate brokers say. “They are not going to have any competition in the marketplace for a new building,” said Steve Heiferman, director of the luxury condominium division for Coldwell Banker Jon Douglas.

Menin’s confidence in the idea notwithstanding, high-rise condominiums remain a rare and often risky form of development in Southern California, thanks to cultural preferences, zoning laws and neighborhood opposition. And such projects are costly, typically running $50 million and more. There are fewer than 100 high-rise condo buildings in greater Los Angeles, real estate experts said.

Several such projects have been financial disasters.

During the early 1980s, to cite a notable example, the developers of a planned 28-story Wilshire Boulevard tower went bankrupt, leaving neighbors to stare at a rusting steel skeleton for eight years before the building was completed by another group. And in Long Beach, the Pacific, a 16-story high-rise completed in 1992, remained empty for nearly five years because its Japanese owners did not want to sell units in a depressed market. The building was eventually sold at a fraction of the $100 million it took to build.

James Ratkovich, whose Pasadena-based real estate firm purchased the Pacific, has sold more than 60% of the building’s 187 units in about 17 months. Built on the beachfront, the Pacific’s condominiums are priced from about $200,000 to about $2 million, much less than what the previous owners had expected to sell them for.

The sales pace at the Pacific exceeded his expectations, but Ratkovich said it will be years before it would make financial sense to build another such structure in the Long Beach area. He estimates that units sold in a new building would have to be priced about 50% higher than those now being sold at the Pacific, where prices average about $300 a square foot.

“I don’t think it would be economically feasible to do it,” said Ratkovich, whose firm is shopping in Southern California and Hawaii for bargain-priced condo projects. “We would rather buy an existing product that was built at the wrong time than build one ourselves.”

The affluent Westside of Los Angeles, however, is probably one of the few areas in Southern California where a new high-rise condominium makes sense, according to Ratkovich and other real estate observers. The area is already home to numerous condominium towers, with clusters along Wilshire Boulevard in Westwood, in Century City, in Santa Monica and in Marina del Rey.

It was the Westside’s large concentration of wealthy residents and high housing costs that attracted Menin and Crescent Heights, which was active in the area during the 1980s when it converted apartment buildings to condominiums.

At the Regatta, where prices will range from $400,000 for one-bedroom units to $1.5 million for penthouses, sales efforts will target wealthy young professionals and older retirees who no longer want to deal with the responsibilities of home ownership, Menin said. A 24-hour concierge and conference center will be among the amenities at the $150-million project.

Already, more than 60 units have been reserved for sale at the Regatta, which is scheduled to be completed by early next year.

Elaine Speyer, a real estate agent who lives in a house in nearby Venice, has reserved a 18th-floor unit of nearly 2,000 square feet with city views. She would like more closet space, Speyer said, but living there will allow her to travel without being preoccupied about her home’s upkeep and security.

“I will have a lot less to worry about, like whether the newspaper is shut off or who is feeding the fish,” she said.

Ironically, although Menin seeks to convert home dwellers such as Speyer into high-rise residents, he himself has chosen to rent a traditional home in the area. “In L.A., I wanted a house experience,” he said.