Los Angeles real estate agents have always looked for a silver lining in the "Golden Mile."
When high prices and high interest rates forced some luxury condominium developers on Wilshire Boulevard to go bust in the early '80s, brokers pushed the residences' champagne views and caviar services. Ultimately, they had to push back prices but still suffered hard times.
So it's no surprise that in the current economic malaise, with Southern California home sales hitting a three-year low, agents have trotted out some high-tech toys to peddle the million-dollar-plus condominiums in the Golden Mile--the high-rise district on Wilshire Boulevard between Westwood and Beverly Hills.
The developer of La Tour Wilshire, a 21-story ritzy condo complex currently under construction, recently unveiled a $500,000 "model center" to promote interest in the property. The center features a slick audiovisual presentation that touts some of the building's lavish details and the spectacular views offered by some of the units.
But when the curtain goes up, the real show begins. With a picture backdrop of the city's skyline offering the only light in the room, a hydraulic model rises from the floor, presenting a finely-detailed, doll-house size version of the 3,000-square-foot units. The model includes a completely furnished floor plan with tile, carpeting and fixtures, right down to the baby grand piano in the living room.
Martha Gallier, the marketing specialist who developed the model center, said that although it is common for large-scale commercial developers to erect project models, it is rarely done for residential buildings. However, she said the developer, in this case Daiwa House Corp. of Japan, wanted to find a niche in the high-end condominium market and believed the model would show off the complex's upscale touches.
"In this case, we are trying to position it as the ultimate in high-rise living, and at the very highest echelon (of luxury) in Los Angeles," said Gallier, a principal with Gallier and Wittenberg Inc. in Dallas. "We're saying that having this address says something about you.
"What we've found is that there is a real momentum of marketing these projects. It's planned long in advance so people can get their own interior designers and begin building their own places. But using a model like this is definitely a new concept."
Many competing condominium projects are also looking for their niche in the sluggish market, with some using videos and nearly all sending direct mail brochures to upscale Westside communities, such as Beverly Hills, Pacific Palisades and Brentwood. High-end homeowners are being feted at lavish luncheons with agents, followed by open house tours featuring the latest word in multimillion-dollar estates.
Although economic analysts believe that the $1-million-and-up market is largely recession-proof, they say the lean times are causing all potential home buyers to move slowly, shopping around for the best buy. And the very rich are no exception.
Sidney Kibrick, executive director of new housing for the Jon Douglas Co., said that agents now must find clients for their properties rather than just list the residence and wait for the offers to come in, as was the case during the 1987-88 real estate boom.
"The market is upside down right now. What used to work in terms of sales just doesn't apply anymore," he said. "The agents are having to do all the work now, especially when you get into the high-end market."
Competition among relatively similar luxury condo projects is so intense that developers usually begin hyping the project at least a year in advance. At the $100-million La Tour Wilshire project, the first on-site model unit will not be completed until February, and the complex is not scheduled to open until mid-summer.
"We just compete among ourselves (on the Golden Mile)," said Kristine Leroux, sales manager of the La Tour project. "Each building has its own character, and you've got to find the right person for your building.
"Some people want larger units or a larger lobby. Some people are influenced by location. And some people don't want a wide mix of prices so that you have very expensive units and more moderate ones."
But for the target audience, each building must have certain features: 24-hour security, valet parking and recreation facilities. After that, it's up to the developer to add extra touches, such as a concierge.
Agents at both La Tour Wilshire and the Wilshire, a 97-unit granite and limestone high-rise, will be pitching the million-dollar views and myriad personal services that will be available at the buildings. But they will be hawking them to a very select group of condo shoppers--those that want and can afford a $1-million to $2-million unit. The two-story penthouse at La Tour is being offered at $7.4 million.
Brokers acknowledge that a $2-million condo is a tough sell in any market outside New York, and especially difficult in an area over-populated with similarly-priced estates. So a marketing hook, like a $500,000 model, is not only desirable, it may be essential.
"The luxury (condo) stuff is always a little more difficult to sell," said Jon Douglas, president of the firm that is selling La Tour Wilshire. "People in that market are expecting the views and the security and the whistles and the bells. But if you give them that and a little more, then the property will move. You just have to be creative."