Vertically challenged
Dozens of condo high-rises are planned in Orange County, but experts say many builders will balk.
By MATHEW PADILLA
The Orange County Register
Too much, too soon.
High-rises for residential living, which were barely whispered about a few years ago, are now the hottest development trend in Orange County.
Market watchers doubt if many planned towers will ever see the light of day. And if they do get built, then some may sit empty as the market becomes flooded with condos of similar style and price. That could become a financial quagmire for those who invested millions in their construction.
Orange County, on paper at least, is getting 44 such towers, including two already built.
That could translate into 5,000 new condos, based on the fact that the towers under development so far hold at least 100 units.
Walter Hahn, a longtime county real estate economist, is a big believer that condominium high-rises will play an important part in future development.
Why? The county is fast running out of vacant developable land. And the county for years has produced more jobs than homes for its workers, leading to a severe housing shortage.
Even so, there is such a thing as too much too soon, he says.
"Five years ago, I don't think anybody was even talking about one," Hahn said.
Then Bosa Development, an outsider from Vancouver, Canada, built and sold two towers in Irvine. Other developers are scrambling to be next, he said. That rush could flood the market with a niche product.
"They all jump in at once and sink the boat," Hahn said.
Developers with projects under way are skeptical their competitors will follow through.
"I'd be shocked if 50 percent of planned projects actually happen," said Matt Montgomery, an executive in the Irvine office of Opus Corp. that is constructing two towers in Irvine and plans a third.
High-rises are complicated and expensive construction, Montgomery said. Recent spikes in prices of materials such as steel, concrete, lumber and plastic, haven't helped.
Nat Bosa, head of Bosa Development, said some owners of sites pegged for high-rises outside of Irvine have asked him if he's interesting in buying their land.
Yet, the fact that anyone is building an Orange County high-rise is a novelty and represents a new development phase for the county.
Urban planner Randal Jackson of Costa Mesa's The Planning Center said the county is finally moving beyond its horizontal fixation.
"Finally, we have broken the mold," he said. "It gives a sense of place.
It's not clear if the planned towers will follow Bosa's model of luxury living with a pool, gym, doormen and hefty price tag. Because towers are expensive to build, some market watchers say they must target wealthier buyers.
Homebuilder Lennar Corp. disagrees. It plans 14 towers in Anaheim's Platinum Triangle. Some Lennar units will be priced for people who want to live and work in the area yet have a hard time affording a home there, said Rich Knowland, regional vice president in Lennar's Anaheim office.
Economist Hahn said making units more affordable likely means making them smaller.
Skeptics of high-rise living point to slowing sales in Dallas and Las Vegas. Sin City, which once had 100 towers planned, has seen seven high-rise projects scrapped or stalled in the past year or so, according to news reports.
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ORANGE COUNTY, CA | High-Rise Boom
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