It took quite some time before the six-acre piece of Los Angeles land, which is set to become the site of the luxury condo complex called Metropolis, to get approved for development. It wasn’t for lack of trying either. Many developers tried to get into the lucrative and rarefied LA housing market, but the project is expected to be completed in 2018, according to Southern California Public Radio.
The $1 billion 1,500-unit condo complex is located in downtown’s South Park neighborhood. If early reports are any indication, there’s a good chance a significant portion of the residents will be a direct factor into why Greenland Holding Group, the developer on the project, was finally able to secure the necessary financing and support. Greenland’s big advantage stems from the fact that they’re a Chinese-owned company with a direct line to millions of potential buyers.
“It’s relatively easy for them to bring to their Chinese customers’ attention that they have this exciting project in Los Angeles,” said Mike Margolis, a partner at the Century City-based law firm, Blank Rome, who frequently advises Chinese companies doing business in the U.S. “That’s a ready made market for them.”
Ever since the recession that struck in 2008, banks and financial institutions have been much more reluctant to sign off on a mortgage like this, unless the developer is able to secure buyers/tenants beforehand. In fact, most require at least half a building to be under contract before they’ll give an approval.
About 45 million people move each year on average, but most don’t have the kind of money required to get into one of these new condos. Fortunately for Greenland, there are a great deal of buyers from their homeland who are willing to do just that. Another reason Chinese customers are highly sought after in the industry is because they’re known for handling transactions in cash. According to a 2015 National Association of Realtors survey, 70% pay all cash.
One of the issues some people are worried about with these potential buyers is the fact that there’s a history of them being absentee owners. Basically, they look at this kind of real estate as a “safety deposit box in the sky.” They can invest their money in something with virtually no risk, but as a result many end up only living in the units part-time.
Greenland has been pretty quiet on the situation but did release a written statement.
“As a global company, we regularly leverage our network of offices around the world to attract international buyers to our growing portfolio of properties,” said Tami Scully, Metropolis’ vice president of sales and marketing. “Metropolis, for example, already has buyers from eight different countries.”