Albeit smaller projects, and slowly, downtown Boston is still seeing the addition of residential condo inventory through new construction and redevelopment.  The Boston W was the last large-scale project to receive financing for construction, and while there has not been additional large-scale projects green-lighted for development in Boston pre-dating the recession, small-scale development is happening across various neighborhoods of downtown Boston.  Two examples include a South End redevelopment at 655 Tremont Street, and a new construction on an empty parking lot at the corner of Clarendon and Lawrence.

South End 655 Tremont Street

At the northwest corner of Tremont Street and W Brookline Street in the South End, 655 Tremont is a 10-unit redevelopment of an existing mixed-use building.  Construction began in 2009, and currently, one unit in the development has sold, and another is under agreement (according to MLSpin).

The development has pushed eco-friendly construction with eucalyptus floors throughout.  The units and building boast generous closets, deeded storage, a bike room, and a common roof deck.  Prices for the 1 bedroom 1 bathroom, 1 bedroom 1.5 bathroom, and 2 bedroom 1.5 bathroom units range from $424,900 – $779,900.

Clarendon / Lawrence Parking Lot Development

Several blocks away from 655 Tremont Street, at the southeast corner of Clarendon and Lawrence Streets in the South End, a developer has taken a former parking lot, and is moving forward with a new construction building.  Such a project is reminiscent of 40 Worcester Street, also an empty South End corner lot until 2009 when a brand new 3-unit rowhouse was erected to fill the space.

Earlier this week, in an effort to get ready for the currently planned late October opening of the W Hotel Boston, the Starwood brand hotel held a job fair, or as they call it, talent auditions.

The hotel portion of the 235 hotel room and 123 luxury condo development at the corner of Tremont and Stuart Streets is poised to open in several months, creating approximately 200 new jobs for the Theatre District of Boston.

Approximately 6,000 people have already applied for jobs at the hotel.  For more information on employment opportunities at the Boston W Hotel, visit the talent center at 660 Washington Street to apply for a position, or their career website.

In light of my most recent conversations with various constituencies across the industry, I have identified 5 reasons condo developers should consider an accelerated marketing plan today, versus postponing to a future date.

1. We are still in a declining market. A number of reports just came out today confirming this. To claim otherwise is to be simply whistling past the graveyard. IHS Global Insight of Lexington announced an expectation that prices will drop through 2009. The IMF downgraded its worldwide and US economic forecasts today for 2009 placing the US at a -2.8% decline for 2009. Home prices will not rise amid a deepening recession.
2. There is still time. A proper campaign can still be mounted to liquidate inventory between now and the week of the 4th of July. The Boston real estate market goes on vacation in late July and August. Now is the time to sell while the market is active.
3. Lenders are getting impatient. Many banks need to get their money off the street. Workout officers are pulling back from offering extensions. An accelerated marketing plan can be an attractive offer for negotiating with a lender. If you are a developer with a note coming due in the next 12 months act sooner rather than later. Lenders are very likely to cooperate in instances where it’s possible that they would otherwise own the project. Carrying and disposition costs for fractured or broken condo developments are unpleasant and unpredictable. In my travels and in speaking with special assets and workout groups I can tell you they are not expecting it to get better soon and they are getting impatient.
4. If you’re going to be short, tis better to be less short sooner than more short later. There is more value in a project today than there is next quarter or next year, that is the nature of a declining market. If you’re forecasting that you’ll be short or close to it today, you’ll be really short next quarter and wicked short next year. Take the pain, pull off the band-aid with one quick swipe, don’t opt for the slow bleed.
5. Certainty in this market ephemeral. If things aren’t going as well as you’d hoped wouldn’t it be nice to forecast a conclusion? You might actually be able to sleep at night if there was some reasonably firm date upon which you could be assured that the thing you fear has come pass.