Market Crash Leaves L.A. Flush With High-Priced Plots
Bought at the height of the real estate market and intended for conversion into high-priced luxury apartment buildings, empty plots of land are littered throughout Los Angeles, undeveloped and quietly back on the market at greatly reduced prices.
"These units were intended for buyers so wealthy that their main challenge wasn't coming up with millions of dollars to spend but rather to find a dwelling that suited their refined tastes, developers said. It turned out that the target market of international jet-setters, movie stars and corporate barons wasn't as deep as many had hoped.
So the fact that many of these parcels come with hard-won government approvals for platinum-level developments doesn't necessarily add to their value, said Norris of Norris Realty Advisors.
He estimates that such commercial properties are worth about 40% to 60% of what they were at their peak in late 2007 and early 2008. But with today's tight credit market and tougher lending standards, few deals are being done."
Now, the high-rise condo market has dried up in L.A. and the planned residential towers no longer seem like such a good idea. Many real estate experts are left wondering what will happen with these empty plots and whether they will be able to materialize into any built projects within the next few years.
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