(Mark Your Calendars: RealShare Apartments 2011, October 20 in Los Angeles).
CANOGA PARK, CA-Developer Wood Partners plans to build a 298-unit, $75 million apartment project called Warner Park on four acres that the company has acquired in Warner Center. Construction is scheduled to begin this month on the project, which is at 6701 & 6703 Eton Ave., with the first units expected to be completed in January 2013. The complex will be evenly divided between one- and two-bedroom units.
Brian Hansen, Wood Partners’ director of development for Southern California, says in an announcement regarding the project that the company “will be building during a favorable construction market, delivering when all the supply of 2007-2010 in Warner Center has been absorbed.” The new project will be “competing against limited new supply,” he said.
Hansen cited a number of factors that favor the project. It is fully entitled and construction drawings are complete, allowing for an immediate start of construction, he said. “Apartment construction in Los Angeles virtually shut down over the past few years, so there will be a distinct lack of new apartment communities coming on line over the next 12 to 24 months to meet pent-up demand,” he said, adding that the “ready-to-go” nature of the project allows for very competitive construction pricing in a market where contractors are eager for work.
After a strong period of building in 2007 through 2009, little new apartment inventory has been added to the market, and that will continue through next year, Hansen said. Based on projects in the pipeline, that trend will reverse beginning in 2013, and Warner Park will be ahead of the curve, he said.
The Wood Partners announcement cited statistics showing that the Los Angeles apartment market has consistently outperformed the nation. From 1999-2007, Los Angeles posted an average occupancy of 96% and average rent growth greater than 6%. After bottoming out at 92% in the fourth quarter of 2008, the overall market has rebounded to just under 95%, with the San Fernando Valley submarket above 95%. Rents have stabilized and are expected to increase 5.8% in 2011 and 6.6% in 2012, according to Axiometrics, an apartment market research firm quoted in the Wood Partners announcement.
“We like what we’re seeing in the L.A. market right now in terms of apartment fundamentals and so do our capital sources,” Hansen said. The Warner Park complex is described as a luxury property that will feature high-quality interior finishes such as granite countertops, stainless steel appliances and vinyl flooring. Common area amenities will include a resort-style pool, a modern clubroom with bar area, televisions with gaming consoles, an Internet caf
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