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Condominium Market Makes Comeback : Golden Mile Turns the Corner as New Luxury High-Rise Goes Up

September 25, 1988|EVELYN De WOLFE | Times Staff Writer

Less than a decade ago, at barely 24 years of age, Michael V. Reyes, president of Urban Pacific Group, became the original developer of The Mirabella, one of the more ambitious luxury condominium projects along Wilshire Boulevard's Golden Mile.

Today, at 31, Reyes is launched on another ambitious venture on that same highly competitive Westside corridor.

The $65-million Dorchester, under construction, will be the first high-rise luxury condominium structure to break ground since the early 1980s on the 1.2-mile stretch from Malcolm Avenue to Club View Drive.

The Urban Pacific project will also be one of the last to be allowed a height in excess of six stories. Five other high-rise projects that also won construction approval earlier, have not yet been started and developers are still negotiating building limitations with opposing community groups.

The Dorchester project, at 10520 Wilshire Blvd., between Warner and Thayer avenues, is a joint venture of subsidiaries of Urban Pacific and V.M.S. Realty Partners of Chicago.

Reyes' success as a developer can be largely attributed to an uncanny sense of timing.

Had he not had this special talent, he might have gone the way of other developers who placed high hopes on condominium development in the Wilshire corridor in 1982, only to be trapped in probably the worst property glut of the Golden Mile.

"You always have to have an exit strategy," said the developer, whose family has long been in avolved in real estate development in the Philippines.

"That was the key lesson I learned from the 1982 experience. You have to analyze a condominium project for its feasibility as a rental. That is one reason why we have reduced the size of units in the Dorchester."

Reyes' first stroke of good fortune and good timing came when he sold his company's interest in The Mirabella just before construction on the project was completed, and just before the collapse of the Westside condominium market.

"After four years of a steady hype, which pushed prices to unrealistic heights, many developers who had built on the Wilshire corridor were forced to declare bankruptcy," Reyes said. "And the whole issue of selling the condos left vacant created a desperate situation for investors."

'Validates Concept'

Even so, Reyes bought a unit in The Mirabella and lived there for more than two years because he said he believed in the future appreciation of the area.

"The fact that Mirabella condos now command among the highest resale prices along Wilshire Boulevard is very gratifying to me and validates the concept that I and other developers had all along about the area," he said.

Reyes believes there were many factors that contributed to the condominium market glut along the Golden Mile.

"When the great bubble burst, all of the 11 projects under way on that valuable stretch of real estate tumbled into misfortune in various ways, causing many projects to be repossessed by the lenders," he said. "High mortgage rates made it difficult for potential condominium buyers to sell their large homes and convert to the new condo life style. There was also a lot of product in the marketplace--about 850 units built and completed between 1981 and 1983 in about three stages. When the first group did not sell, there was a sort of chain reaction.

"Sophisticated buyers were aware that the market was going to be in trouble, and they waited on the sidelines for an opportunity to buy from the lenders," the developer said.

In recent years, the Wilshire corridor has slowly absorbed its inventory of vacant units, and current activity and revised sale prices strongly suggest that the tarnished mile is becoming golden again.

Reyes noted that when he sold The Mirabella, units were selling for about $225 a square foot; currently that figure has been upped to between $350 and $450 a square foot.

Reyes is now the first developer on the scene to be building a new major venture, and he has located the 16-story Dorchester in the heart of the revitalized stretch.

When completed next March, the 108-unit Dorchester will contain 217,000 square feet of two- and three-bedroom units ranging from 1,580 to 2,230 square feet. Prices will range from $400,000 to $750,000, with penthouses to be sold for $2 million plus.

The top two floors will house four two-story penthouses with about 6,700 square feet each. Each penthouse will have three bedrooms, a library, skylighted entry, grand stairway, wood-burning fireplace, sauna, whirlpool baths and maid's room.

The building's exterior, with a green mansard roof and sandblasted finish, with accents of polished marble and corbel banding, will have a porte-cochere leading into a 13-foot-high lobby with coffered ceiling, exotic wood walls and patterned marble floors.

The main entrance will feature reflecting pools and water sculptures. A concierge, doormen and parking attendants will be stationed in the lobby.

The Dorchester was designed by Vitro Architects, which also helped design The Mirabella. Tutor-Saliba Corp. is the general contractor; the lender is Security Pacific National Bank.

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