LA’s New Landlords
Is Los Angeles the Next Shanghai?
The Korean Airlines-owned Wilshire Grand Center, built at a cost of $1.35 billion, is 1,100-ft. high and a striking symbol of accomplishment for the region’s 225,000 Korean immigrants
There are more than 225,000 Koreans living in and around Los Angeles and this week they have a new symbol of accomplishment, a glass-sheathed hotel, office and retail tower topped by an enormous, sail-shaped LED screen that nightly beams the Korean Airlines logo across hundreds of neighborhoods sprawling 336-meters below.
Seated in the center of downtown Los Angeles, the $1.35 billion Wilshire Grand Center is the creation of Cho Yang-ho, 68, the CEO of Korean Airlines and the airline’s corporate parent Hanjin International. Cho fell in love with LA while a student at the University of Southern California. “LA is my second home and I’ve long dreamed of giving back to this beautiful city,” he said at the ribbon cutting.
Korean consul Lee Key-cheol was even more effusive: “The largest bird of Korea has built the most beautiful nest in the City of Angels.”
At 73-stories the Wilshire Grand Center is the largest building west of the Mississippi River, but it’s size is relatively modest when compared to Dubai’s 823-meter Burj Khalifa. But LA loves it. “This successful partnership demonstrates our willingness for collaboration with our friends and neighbors across the world,” says Kevin de León, a California State Senator from Los Angeles.
It’s too soon to say, of course, if gangnam style will become LA’s new meme. But there’s no denying the city’s embrace of Asian property developers, who poured over $1.5 billion into downtown Los Angeles construction in 2015, and their stated goal of turning America’s second largest city into a destination resembling Seoul and Shanghai.
Built by Chinese real estate giant Greenfield, the $1 billion Metropolis development sits on 6.33 acres in downtown Los Angeles. The development’s condos will sell from $580,000 to $2,000,000.
A two blocks south of the Wilshire Grand another $1 billion development called Metropolis is being erected by China’s Greenland Group on 2.57-hectares next to a roaring freeway. Scheduled for 2018 completion, the mixed-use development will have a luxury hotel plus 1,500 residences, close to half of which already have been sold to Mainland Chinese. “All this construction reminds me of Beijing and Shanghai,” says Greenland Chief Technical Officer Winston Yan. “And now it’s happening here.”
Shenzhen Hazens Real Estate Group already has a major project underway, Shanghai’s Shenglong Group recently obtained permits to spend $1 billion building three downtown residential towers and China Communications Construction Group is expected to start construction on a $1 billion development next year.
The biggest development on the horizon, however, is Oceanwide Plaza, a 140,000-sq. meter project containing office towers, luxury condominiums, 15,425-sq. meters of retail space, a Park Hyatt hotel and a two-acre outdoor amenity deck. Everything is built atop a seven-story podium that is banded by a LED scroll more than a block long designed to mimic the environment of New York’s Times Square. Oceanwide is scheduled for completion in 2019.
Oceanwide Plaza is a $1.2 billion mixed-use project in downtown Los Angeles being developed by Beijing conglomerate Oceanwide. Located across the street from where the Lakers play basketball, the development will have a large LED ribbon that scrolls around its base.
Beijing-based Oceanwide Holdings says its concept is outdoor living in an urban environment, but what makes Oceanwide Plaza a sure winner is its location across the street from Staples Center where the Los Angeles Lakers play basketball and next to the LA Convention Center. “The draw power of our location is tremendous,” smiles Thomas Feng, chief of Oceanwide’s U.S. subsidiary.
Up until the start of this decade downtown Los Angeles was a financial district that largely emptied at night. Even today less than 50,000 of the 500,000 people working downtown actually live there. Most Californians, if they have the money, prefer to live in detached suburban homes surrounded by grass and palm trees with a swimming pool in back. Recently, this residential preference has started to change because of gridlocked traffic and higher water cost resulting from a changing climate.
California politicians also are pushing for higher, denser cities. Builders now are regularly excused from height restrictions and existing zoning codes that mandate ample parking and traffic mitigation. Building allowances and financial incentives are especially generous along transportation corridors and subway hubs that at present don’t even exist. Commuting will become even more painful in November when California’s gasoline taxes soar to more than 58-cents a gallon. By making driving more painful, Los Angeles hopes to force people to embrace “vertical urbanism” of the sort existing in every major Asian capital.
Motivated by China’s softening economy and Beijing’s seeming inability to halt the outflow of investment capital, Chinese property developers were quick to take advantage of California’s new urban sensibilities and today are poised to enjoy generous returns on their investments.
“When Greenland first arrived in LA they found that nobody was living in the heart of America’s second largest city,” remembers architect Robert Jernigan, the Gensler managing principal working on the Metropolis project. “So it bought the last 6.33 acres of undeveloped land downtown and began to fix a problem we created.”
Any reluctance to approve so many large projects simultaneously evaporated when every Asian developer agreed to include a luxury hotel in their design. Says Jernigan: “Los Angeles loves the 15.5% hotel occupancy tax because it’s a major source of revenue local citizens don’t have to pay.”
Movement from the suburbs back to the city will grow as the post war Baby Boom generation begins to retire. Certainly all of the Asian-financed developments in LA are striving to create a live-work-play atmosphere. The fact that a substantial percentage of the new living units will belong to absentee owners is a small source of concern. But LA’s city planners know the exciting urban environments now being created will promote higher property values, continued economic expansion and further integration with the dynamic cultures of East Asia.