Imagine building 35 custom homes on speculation at an average sales price of $2 million.
Now imagine those homes located a short drive from Beverly Hills and a short walk to high-rise offices, a legitimate theater, a five-star hotel frequented by kings and presidents, a recently expanded shopping center, new movie houses and the 20th Century Fox film lot.
Great location, right? If you haven't already guessed, it's Century City.
Despite Century City's advantages, though, it takes guts even there to build such expensive homes with no buyers lined up.
It takes someone who can ignore possible effects of the stock market crash and the new tax law, which limits the amount of indebtedness on real estate that will be eligible for a combined deduction to $1 million for a first and second residence.
It takes someone with resources and experience.
In the case of the costly Century City homes, it takes Ray Watt and Bernie Burger.
Watt is to real estate development in California what Lee Iacocca is to the auto industry. They're old warriors who have survived financial ups and downs.
Burger is president of Watt Luxury Housing Inc., just one of many subsidiaries of Watt's Santa Monica-based Watt Industries, but it is the subsidiary that is developing Century Woods Estates with prices from $1.6 million to $2.3 million.
From the developer's standpoint, these prices aren't scary, Burger says, despite the stock market and new tax law, "because the first-class quality of the design, coupled with the prime location of the project, will overcome those obstacles.
"If people want to live in this location and want to enjoy this luxurious life style, they'll buy because our product is so special."
"Besides," Watt added, "we don't think the mortgages will be much more than $1 million anyway."
That means buyers could be putting as much as $1 million or more down!
Watt claims he isn't worried. He's counting on the kind of good, solid buyers he says he has had in Century City in the past: doctors, lawyers, judges and a sprinkling of celebrities.
Actress Rhonda Fleming and her husband, theater magnate Ted Mann, own a couple of condominiums there, and former President Gerald Ford bought and since sold another.
Watt is also counting on his decades of developing in California and other states and his past 10 years of building in Century City. Resales in his first venture there, Century Hills, are going from a healthy $600,000 to $2 million.
Less Expensive Condos
Still, there have been no new homes for sale in Century City at any higher prices than are being asked at Century Woods Estates, which opens today off Century Park West between Constellation and Olympic boulevards.
If the name Century Woods Estates sounds familiar, it's because Watt developed 48 condos in the same neighborhood known as Century Woods, but those were completed in 1983 and were less expensive.
Watt has developed several condominium projects in Century City as well as the twin, 23-story office towers known as Watt Plaza. When it came to developing the second phase of Century Woods, though, he and Burger wanted to build something different.
"We could have built 96 more units like those in the first phase and priced them from $700,000 to $1.2 million," Burger said. The first phase consisted of four 12-unit buildings, each with three stories, including an underground garage.
"But as we talked, we wondered about building a single-family detached environment. At first, it seemed unfeasible, but as we got into it, we thought we could."
As it's turning out, not all of the units at Century Woods Estates will be detached. They won't be officially "single-family," either.
"But we worked hard to see that they will look like single-family detached homes even if they're not," Burger stressed.
Like Century Woods, the new homes, also condominiums, will be built in the middle of a pine forest with a waterfall, but no two homes at Century Woods Estates will be exactly alike. Two well-known architects, Peter Choate and Caspar Ehmcke (who worked for Wallace Neff), are designing each one to be different from the others.
Involve Buyers in Design
"We're building three models to set the stage," Watt said. "Models are important from a marketing concept, but we want to get our buyers involved in the design."
At the same time, all of the homes will be architecturally compatible, because they will all have a Spanish or Mediterranean style, with courtyards, gardens and individual walls. The style is reminiscent of the late architect Neff, who designed many estates, especially in the '20s and '30s, for celebrities in Beverly Hills and Bel-Air.
Watt says the theme of Century Woods Estates was inspired by this "Golden Age of California Architecture," when many of the former homes of Century Woods buyers were built. "They came out of gorgeous homes, and they want to wind up in just as gorgeous a home even though it's a condo," he said. "It's nothing for one of our buyers to spend $300,000 in decorating."