One of the first condominium penthouses to be completed in downtown Los Angeles in roughly six years is now for sale. For $4.1 million, the buyer can live atop TEN50, a luxury high-rise nearing completion in South Park, a thriving commercial district.
To satisfy residents’ appetites for new condos, high-rise towers have sprouted all over downtown L.A. While many won’t be finished for years, TEN50 is shaping up to be completed by the end of 2016.
“We’ll be the first new condos in a high-rise downtown in almost a decade,” said Arden Hearing, managing director for Trumark Urban, the developer of TEN50. The 25-story tower consists of 151 luxury residences.
The penthouse—one of two top-floor, duplex units in the building—has 3,500 square feet of living space, floor-to-ceiling windows with skyline views and its own outdoor terrace. The apartment is being sold as a shell that will be “entirely customizable,” Mr. Hearing said.
The residence will have 3,500 square feet of living space and a private terrace.
Rendering: SteelblueBuilding amenities include a 13,000-square-foot deck with a lounge, a swimming pool, yoga facilities and sweeping city views. Residents will also have access to a screening room, a private dining room and a landing pad for drone deliveries.
New residential developments such as TEN50 are a testament to the ongoing revitalization of downtown L.A. For many of the city’s residents, the area was a place where some worked, but rarely played—until a construction boom took root in the late 1990s.
The revitalization of downtown L.A.
In 1999, the Adaptive Reuse Ordinance was approved for downtown L.A., allowing the conversion of dozens of historic and underutilized buildings into new housing units. This gave developers an incentive to build, said Paul Habibi, a professor at the UCLA Ziman Center for Real Estate.
Residential development slowed during the global financial crisis but picked up again soon afterward. “When we came out of the recession, there was a lot of tailwind promoting downtown development,” Mr. Habibi said.
The arrival of the Staples Center also contributed to downtown’s growth. The massive sports arena—which is home to four professional sports franchises, including the L.A. Lakers and the Clippers—opened in 1999. It was followed by L.A. Live, a nearby 27-acre entertainment complex with theaters, restaurants, bars and other attractions.
A condo shortage
The first wave of luxury condos came in 2010, when the Ritz-Carlton Residences opened at L.A. Live. That development, with more than 200 units, sold out in 2014. But since then, no new condo product of this scale has been finished.
By the end of 2017, there will only be 461 new move-in ready condo units in downtown L.A., according to data from condominium sales and marketing firm Polaris Pacific. This figure includes all the units at TEN50, as well as the first phase of inventory at Metropolis—a sprawling, mixed-use project that will bring residential, retail and hotel accommodations to South Park.
For high-rise apartment buildings in downtown L.A., the average price per square foot in June was $891, a 24.4% increase compared with the same period in 2015, according to Polaris Pacific.
“There’s very little inventory throughout the L.A. market, so that puts some upward pressure on pricing,” said Rhonda Slavik, director of business development for Polaris Pacific. The firm is leading sales efforts for TEN50.
Pent-up demand for downtown condos can be attributed to the neighborhood’s high jobs-to-housing ratio. At TEN50, more than a third of the residences available for sale went into contract in less than two months following its April sales launch. At least 80% of these buyers work downtown, and roughly half of them live in the area already, Mr. Hearing said.
“We have a half a million jobs within two miles and no new condos,” Mr. Hearing said. “It’s a very lopsided market.”
Write to Gina Faridniya at gina.faridniya@dowjones.com