An urban zip code has cachet. More to the point, home ownership in an urban zip code has cachet. From empty-nesters to young couples to adventurous investors and beyond, Downtown is attracting a growing demographic clamoring to buy a piece of the Central City's residential revitalization.

Killer views: Downtown lofts attract buyers with picture windows, high ceilings and undefined space. Seventy of the 119 units in the Toy Factory Lofts (above) have been sold or reserved. Photo by Gary Leonard.

Though the overheated housing market nationwide has shown some signs of cooling, the Downtown condo market is just getting started, and competition for limited for-sale units has been fierce. During a recent Saturday afternoon open house at the Toy Factory, nearly two-dozen people crowded the sales office for a tour. USC students and parents, hipsters, professionals and, as one loan agent called them, "Malibu moms," milled about the sales office, which was decked out like a loft with a shaggy orange rug, white leather divan and abstract paintings. T-shirts printed with the building's logo and chocolate cookies awaited at the end of each hard-hat tour.

As the steady stream of visitors popped in and out of lofts plastered with "wet-paint" signs and dodged construction crews fixing windows, those who had just finished the tour signed contracts for units ranging from the high-$200,000s to upwards of $600,000.

"Because they have to be pre-approved, and there is such a big interest list, they are pretty interested," said Solomon. "The way it worked is if they decided on a unit and it was available, then they put a 3% deposit down. Within days we have them back to sign a purchase agreement. It happens quickly."

A similar scenario is being played out at the Douglas Building, which isn't set to open until November. Millie Radkovich, a sales agent for the project who has led several tours of the 100-year-old building, said she has a list of about 200 people who want to buy one of the 50 lofts. While the gutted structure's original hardwood floors, double hung windows, exposed brick and ornate wrought iron stairways are a big sell, buyers must nonetheless imagine what the space will look like when it's completed. Where walls once stood, blue tape now marks the boundaries between each unit.

"There's been some begging going on," said Radkovich. "In general people are so anxious to get on the list so they can get a unit before they're all sold out. A lot of phone calls are being made. As soon as I open my office [in late April] they want to be the first appointment."

But buyers will find that nearly half the Douglas units have been reserved for early birds, many of them family and friends of the developer, a practice common with these projects, said Bill Stevenson, a partner in the Douglas.

"People have found out about us mostly by word of mouth," he said. "When we started working on this project a year ago, we thought we were going to do apartments. Out of the roughly 200 people who called, 95% said they preferred to buy rather than rent."

Trudi Sandmeier, a Pacific Palisades resident who reserved a unit at the Douglas, works at the Los Angeles Conservancy on historic preservation issues. She said the building's history and investment potential attracted her to the property.

"I'm delighted it will be revitalized and reused," said Sandmeier, whose office is in walking distance from the Douglas. "I am a firm believer that Downtown is at the beginning of its upward momentum."

As part of a bi-weekly tour of Downtown lofts, Sandmeier and the Downtown Center Business Improvement (DCBID) lead potential buyers, as well as the curious, into the newest loft projects. According to the DCBID, a survey of participants reveals that nine out of 10 people prefer to buy instead of rent.

"It's one of the things we struggle with on the tour," Sandmeier said. "People are very serious about buying but there aren't that many projects."

One of the pioneers in the for-sale market was the Lee Group and CIM Group, which partnered to develop the $35 million Flower Street Lofts across from Staples Center. The project opened last summer and has sold 88 of its 91 units, which start in the mid-$400,000 range. What's left are the high-priced models that cost up to $900,000. The success of Flower Street Lofts prompted the developers to pursue two additional for-sale ventures in the area, including the Grand Lofts opening this fall, and the Olive Street Lofts, which have yet to break ground.

"We have a big interest list for Grand Lofts at 11th and Grand," said developer Jeff Lee of the Lee Group. "But we won't sell until this spring. People call about Flower Street Lofts so we send them here and they get on the list. It's a very diverse group of people, a lot professionals, artists, architects, doctors, lawyers, city and county workers, entertainment professionals, actors, retirees, those in the garment industry."

The Los Angeles Economic Development Corp. estimates that more than 6,000 housing units, for-sale and rental, are currently in planning or under construction in Downtown. Jack Kyser, chief economist at the LAEDC, said that even with a conservative estimate of 1.5 people per unit, Downtown will see a minimum of 10,000 new residents within the next few years.

"I would say it's just all of a sudden people are waking up in Southern California," he said. "They don't want to spend a whole lot of time on the freeway, and mobility is getting worse because of state budget cutbacks and slashing of transportation funding. Urban living is back in, and back to the future. People forget that Bunker Hill was once a residential area [before it was razed for development], along with Crown Hill."

City planners have long said that the litmus test for Downtown's residential revitalization is critical mass. According to some estimates, that means an urban center needs roughly 4% of a city's population to move in so that the area doesn't wither away. In Downtown's case, a total of about 150,000 new urban pioneers would need to be recruited.

"I would say we are still a ways away from critical mass, but we've made enormous progress," said Carol Schatz, president of the Central City Association, a business advocacy group. "Five years ago nobody envisioned that over 1,000 units would come to market last year and another 3,000 would open this year. I'm paid to be an optimist, but I wouldn't have believed it. It suggests that the market is mature enough and deep enough that renters are turning into buyers."

The Urban Home

For-sale Market Booms