Two weeks ago, there was chatter that downtown's Chapman Flats, an 168-unit building at 8th and Broadway, was in trouble amidst bank re-appraisals. Now comes the official word: The building is going rental. Cancellation instructions to everyone who was in escrow were sent out, while a press release from Mark Farzan, the spokesman for the project, notes the following: "We had over 50% of the flats in escrow within a short time after our grand sales opening in June 2007. However, due to the current economic conditions, real estate market downturn and tightening mortgage market many of our potential buyers cancelled their escrows. Some had second thoughts about the timing of their purchase and many could not obtain financing." UPDATE: Rents will range from $1,400 to $3,500. [Photo via Flickr user Don Reno]
According to a report last summer, 80 percent of the units at the Chapman were priced under $500,000. Leasing prices for the building, a 1912-built historic landmark, could be released as early as this Friday.
And press release #1:
Contact: Mark Farzan FOR IMMEDIATE RELEASE
Phone: (818) 906-8676
CHAPMAN FLATS TURNS RENTAL
After obtaining its Certificate of Occupancy from the City of Los Angeles, the developers of Chapman Flats have recently decided to turn Chapman into a rental property. Mark Farzan, the spokesman for the project said “We had over 50% of the flats in escrow within a short time after our grand sales opening in June 2007. However, due to the current economic conditions, real estate market downturn and tightening mortgage market many of our potential buyers cancelled their escrows. Some had second thoughts about the timing of their purchase and many could not obtain financing”.
Mark added “The number of buyers that were able and committed to close their escrows fell below our pre-closing requirement, and that is why we had to make this painful decision. This is especially painful because many of the buyers who stayed in escrow were truly in love with the unique historical features of The Chapman.
We firmly believe that downtown is the heart of business and culture, and with substantial amount of additional commercial and residential development underway, and more people moving here, downtown will have a bright future”.
And press release #2:
CHAPMAN FLATS TURNS RENTAL
The celebrated residential project will begin offering units immediately
LOS ANGELES (MAY 07, 2008) -- The 168-unit Chapman Flats residential project at Broadway and 8th Street in Downtown Los Angeles will begin offering units for rent immediately.
The historical building, which generated excitement after its grand opening in June, 2007, features individually designed flats with classic heritage and contemporary finishes that appealed to many interested in urban living. The building has a resident rooftop park, a classic marbled entry, 360-degree views of the city and doorstep access to ground-floor retail including Kelly’s Coffee.
The Chapman building was initially developed as a condominium project, with units offered in the $300,000 to $950,000 range, and there was immediate interest from the home-buying public. Within months, more than 50 percent of the flats were presold.
However, in the intervening months, there have been significant changes in mortgage lending guidelines at many financial institutions that have made it impossible for some buyers to secure financing. The number of buyers that were able and committed to close their escrows fell below the pre-closing requirement and the decision was made to convert the property to a for-rent status.
“We are saddened to make the decision because so many buyers were truly in love with the unique historical features of The Chapman,” said Mark Farzan. “For these same reasons, we believe there will be tremendous interest from renters who are seeking a dynamic urban environment like Downtown.”
Units will be offered for rent in the $1400 to $3500 range. For more leasing information call (213) 892-9100.
· CurbedWire: Chapman Flats Reappraisals? Roosevelt Lofts Questions [Curbed LA]