Architect Christopher Pak understands what upwardly mobile Koreans want and that's why his latest project, a 22-story residential tower, has no apartments on the fourth and fourteenth floors.
The number 4 sounds like the word death in Korean, Pak says. So in his building the fourth level will be for parking and the residential floors will skip the fourteenth.
Pleasing Korean clients is a key part of keeping the downtown and near downtown Los Angeles property market hot, in stark contrast to the chilly sales in most of Southern California in the wake of the subprime lending crisis.
Koreans and other affluent Asians are joining the ranks of young loft dwellers who have fueled a resurgence of downtown Los Angeles as a place to live, not just work.
Koreans have a natural affinity to downtown, said Pak, a Korean American who is also a partner in the $160 million development, due to be completed in 2008.
Koreans, he said, believe urban cores as having better quality of life than rural or suburban areas, an idea counterintuitive to many in this sprawling city of 3.8 million with few high rises.
The near-downtown neighborhood of Koreatown had already been undergoing a major rehabilitation from its days of devastation in the 1992 race riots.
Today the neighborhood is completely different, bustling with activity day and night and increasingly awash in wealth.
After the Korean government relaxed overseas investment limits in 2006, individuals and real estate firms have descended on the Los Angeles market, home to the largest Korean community in the world outside of Korea.
PARK FIFTH GOING QUICKLY
While Koreatown was an obvious first destination, this affluent group has rapidly expanded into the dynamic downtown market down the street.
More than 7,000 new residential units have opened in downtown Los Angeles since 1999, with another 7,500 under construction and several larger projects close to breaking ground, according to the downtown Los Angeles Business Improvement District. The BID estimates the population will double from the current 29,000 to 58,000 by 2009.
Almost 25 percent of downtown's residents are Asian.
The subprime meltdown has not affected our downtown market, said Robert Cipolloni, a real estate consultant at Windermere Properties who also moved downtown in 2006. Yes, there's a glut with all of the new condos being built, but at the pace that people are moving into downtown L.A., that glut is going to be eaten up.
The anticipated growth has recently sparked some eye-opening projects. The largest is Park Fifth, a 890-foot (270-metre), $1 billion high-rise condominium that will house 726 residential units ranging in price from $400,000 to $5 million.
The building, to be completed in 2010, has been in presales for just over two months and 50 percent of the units have been sold, according to developers.
Cipolloni recalled a gathering hosted by a Korean agent that resulted in 40 people each putting down $10,000 deposits to reserve units in Park Fifth.
A RELATIVE BARGAIN
Money appears not to be an issue, especially compared with prices back home.
In a 2007 cost of living survey from Mercer Human Resource Consulting, Asian cities were three of the top five most expensive in the world, with Seoul in third place, followed by Tokyo and Hong Kong. Los Angeles was a relative bargain in 42nd place.
We definitely have a large Asian element, said Richard Marr, Park Fifth's project manager, who says he can't say for certain how many of Park Fifth's presales are Asian buyers. If you go to Seoul, Shanghai, Singapore, there's a certain prestige in living in taller buildings on the higher floors.
Korea's largest real estate development company, Shin Young, is buying a parcel of downtown land for a 334-unit condominium building.
The company is already building a 40-story condo skyscraper in the heart of Koreatown. However, its downtown building won't contain the accoutrements to appeal to Korean buyers. It's an investment property for American buyers, the company said.
Koreans aren't the first Asian community to invest heavily in downtown Los Angeles. In the 1980s, Japanese companies were on a tear to acquire downtown real estate.
When the Nikkei was booming, the Japanese bought into trophy Los Angeles properties at prices that were too high, said Stuart Gabriel, director of UCLA's Richard S. Ziman Center for Real Estate. The regional downturn of the 1990s crushed them.
Despite the new arrivals, including the area's first supermarket, downtown remains the home of the country's largest skid row and parts are deserted after dark. That's why Gabriel strikes a cautionary note about the downtown housing rush.
If I were the developer of (Park Fifth), I'd be concerned about the timing of that play, said Gabriel. You don't want to repeat the mistakes of Miami and San Diego.