As published in Scotsman Guide's Commercial Edition, June 2005.
As the high-rise-condominium phenomenon spreads like wildfire across the country, financing opportunities for lenders also are expanding rapidly. The potential for loan origination has dramatically increased through forward commitments to finance entire projects, multiple units in a project or just individual units.
High-rise condos are no longer limited to traditional downtown areas such as New York City and Chicago. Spearheaded by savvy developers, hundreds of towers containing thousands of units are popping up across the nation.
In more suburban markets such as California’s Orange County, the lure of urban living is a recent phenomenon. Limited inventory and diminishing land have resulted in fewer new-home choices in suburban communities. In addition, an aging population of empty-nesters is seeking a simpler, lock-and-leave lifestyle.
The market demand for housing in urban areas is even growing substantially among young singles and childless, professional couples. Builder magazine reports that homebuyers from foreign countries are also interested in high-rise condos. These buyers sometimes are more in tune culturally with high-rise living and take advantage of the weak U.S. dollar. Especially in revitalized urban areas, city living has become more attractive to a wide spectrum of people.
Urban living has its positive attributes. Higher-density housing in urban areas offers people the attractive advantage of working, shopping and playing where they live. Urban locations offer more lifestyle variety than suburban life in terms of stores, restaurants, libraries, theatres and entertainment — with little or no driving.
As a result, Orange County’s 40 years of suburban living is evolving into an urban-development market. There, builders are looking back to cities for new opportunities for higher-density housing. In fact, the Orange County cities of Anaheim and Santa Ana have put out the welcome mat to reputable developers willing to build high-rises in those communities. Recently, Santa Ana even insisted that a developer include a high-rise in its mixed-use project, which the city had just approved.
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