Six years ago, the two firms saw an opportunity to grow in Southern California, opened offices here and started a joint development project as South Group.
Together they checked out Los Angeles and saw potential for taking their Oregon ideas to a bigger stage. They looked at the dreary parking lots near Staples Center and saw "a clean slate with no baggage," recalled Homer Williams of South Group.
Another developer's successful condo conversion nearby convinced them there was a market for upscale condos downtown and emboldened them to reach beyond conversions and build from the ground up.
"They saw opportunities to build high-rise housing in downtown L.A. where no one who had been here for years and years, including ourselves, thought it was possible," said competitor Rosenfeld, a founder of Urban Partners.
Each firm still has a big presence in Portland and separate projects in Southern California. Williams & Dame, for instance, has an 800-unit condo development underway in Long Beach while Gerding Edlen has a 311-unit project on Sunset Boulevard.
The region's cooling residential real estate market pushed downtown condo prices a bit lower in the third quarter but there were still many sales, said real estate broker Mark Tarczynski of CB Richard Ellis.
Sales may drop quite a bit this fourth quarter, in part because uncertainty related to the credit crunch has sidelined buyers as they wait to see what happens to the market, he predicted. "This is a speed bump we'll get past. We are at a very weird time."
Tighter credit has made it harder for South Group's condo buyers, especially those who are self-employed, South Group's Atkins acknowledged. "This is a cyclical business, and we are in the downside of the cycle. But this isn't like 1991" when the Los Angeles economy began contracting and home values fell, he said.
City leaders also need to do more to reduce the number of homeless people on downtown streets, Atkins said.
The company still plans to break ground next year on two more condo buildings downtown, bringing South Group's total spending on downtown construction to $750 million.
"Smart, urban, high-rise housing has very little competition," Cody said. "The need has been unmet for so long."
roger.vincent@latimes.com
