Undaunted by recent discouraging news in the California housing market, condominium developer South Group is finishing up its third high-rise building in downtown Los Angeles and planning two more.
The Portland, Ore.-based builder is the largest developer of new residential buildings downtown and it is gambling $750 million that demand for housing in condo towers in urban neighborhoods is still strong and that today's dip in the market will be brief.
By South Group's reckoning, the current building boom -- the largest in decades -- transforming many Los Angeles County neighborhoods with billions of dollars' worth of new residential and commercial development is unstoppable as long as the region's economic engine keeps growing.
"L.A's physical form does not match its economy," said Tom Cody, a South Group principal who described much of the local terrain as "a sea of mediocrity."
Angelenos are hungry for a more pleasing street scape and developers who help provide it will prosper as the city's trend of growing-in instead of just out picks up speed, he said, and downtown will continue to get a big share of the action.
Maintaining sunny optimism about one's prospects is a basic requirement for real estate developers, but so far South Group's perception about what the market wants has proven correct.
Following a model of environmentally friendly high-rise design it perfected in Portland, South Group has sold more than 470 units in downtown Los Angeles at prices ranging from the mid-$300,000s to $2.4 million. It was the first company in more than two decades to go beyond converting older buildings to trendy lofts and began building brand-new, high-rise condos.
Even in a neighborhood where the skyline changes almost every other month, South Group's work stands out. Their three buildings called Elleven, Luma and Evo fill almost an entire block at 11th Street and Grand Avenue, where a new urban neighborhood with shops, housing and a park is emerging.
Last month, South Group was recognized by the U.S. Green Building Council for building the first California condominium project to receive a "gold" rating for its environmental standards.
The Green Building Council, the country's largest arbiter of green real estate standards, singled out the Elleven tower for such features as bamboo floors and energy-efficient heating, air-conditioning and water systems.
