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My answer is (B). It took me 02:49.

The whole sentence is underlined. Past experience indicates the sentence should focus on the best way to convey its meaning. It turns out to be testing idioms.

(A) Starting with (A), I found that the placement of "not long ago regarded to be undesirable" is not ideal.

Still believing this question is about the meaning, I read option (B). It is clear. Should I choose (B)? Despite the fact that I ended up with (B), I always try to be thorough and read (C) through (E).

(C) can be eliminated because it is not a sentence: it should read ".... urban waterfronts not long ago was regarded as undesirable."

But (D) and (E) do not contain glaring meaning issues. I was stunned to find three contenders: (B), (D), and (E).

Only through careful comparison did I realize it is testing idiom use between consider and regard.

As discussed here (https://www.expertsglobal.com/use-of-co ... as-on-gmat), "the correct usages of these two terms are 'considered' and 'regarded as' and there are no alternate usages for these terms".

The rule is straightforward, but it took me quite some time to figure it out. My choice of (B) is also influenced by its brevity.
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(B) is the correct answer IMO

A) Urban waterfronts are increasingly prized as prime real estate and dedicated to upscale housing and shopping projects, not long ago regarded to be undesirable.

Idiom error
+ Modifier gives a sense that it modifies shopping projects not Urban waterfronts

B) Correct

C) No Main verb

D) Idiom error

E) Idiom error
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IMO B - took me 1 min 50 Secs...

Honestly the fight is between B vs E -- but first lets eliminate the other options.

A) Urban waterfronts are increasingly prized as prime real estate and dedicated to upscale housing and shopping projects, not long ago regarded to be undesirable. - Regarded to be undesirable should actually be "regarded as undesirable, then again i think there is some ambiguity here - as to what was undesirable the upscale housing and shopping projects or the urban waterfronts.... Hence A is gone.

B) Urban waterfronts, which were not long ago considered undesirable, are increasingly prized as prime real estate and dedicated to upscale housing and shopping projects.- Makes sense the S-V is ok , and if you remove the Modifier between the two commas the answer still makes sense.

C) Increasingly prized as prime real estate and dedicated to upscale housing and shopping projects, urban waterfronts not long ago regarded as undesirable - Seems like an incomplete sentence, towards the end there must be a verb.

D) Not long ago regarded to be undesirable, urban waterfronts are increasingly prized as prime real estate and dedicated to upscale housing and shopping projects. - Regarded as is the right usage also the meaning is all botched up.

E) Urban waterfronts, not long ago considered as undesirable, are increasingly prized for prime real estate and dedicated to upscale housing and shopping projects. - Now between B and E the difference is in the bold part. The phrase Increasingly prized for prime real estate doesnt make sense here... as you need to have a person to whom you can "increasingly prize something" the correct usage is "increasingly prized AS" and not "For".
Hence E is gone and B is the answer.
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The official explanation is here.
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