FP3 Seaport District Condos Slow to Sell

When Berkeley Investments Inc., local restaurateur Barbara Lynch, and Mayor Thomas Menino broke ground at the mixed-use FP3 condo development on Friday, April 20, 2007, the project was heralded as the new luxury baseline in the Fort Point Channel.  More than a year and a half later, the development is now a reality, but the 92 residential loft-style condos are not moving off the market.

In July of 2008, a Berkeley employee was quoted in Banker & Tradesman saying that 38 units were Under Agreement poised to close when the certificate of occupancy was issued later in the summer (see Brokers: Fort Point Condo Project Too Pricey for Neighborhood 100 KB PDF), yet, fast forward to today, and a very different reality exists with the certificate of occupancy indeed in place, but only 9 units have sold, and 2 are Under Agreement.

The pertinent condo sales statistics at FP3 currently include:

  • Number of Listings Sold: 9
  • Percentage of Building Sold: 9.8%
  • Average Sale Price: $610,436
  • Median Sale Price: $541,000
  • Average Price per Square Foot: $659
  • Average Days on Market: 120

FP3 Boston Condos

The popular restaurateur Barbara Lynch has opened the much hyped Sportello restaurant on the ground floor of FP3, alongside her new lounge, simply called Drink. The presence of Lynch onsite has been one of the cornerstones of marketing for FP3 developers, both for the condo development itself, and the overall neighborhood, but condo sales in the building have not been able to keep pace with the opening of Lynch’s new posh attractions.

Local real estate broker, Elad Bushari of Bushari Group Real Estate says that he is a fan of the area,”the location is great, close to the Financial District, the red line and great restaurants. The top floors are amazing, big windows, outdoor space, and great views.” However, Bushari cites price in accounting for the significant difference in sales velocity between FP3 and more popular condo developments such as 285 Columbus Lofts that are approaching sold out status in a much shorter sales cycle with,”I think that it has a lot to do with the developer’s flexibility on prices, most of the feedback I received from my buyers is that it’s just too expensive; the area is going to be great but it’s not there yet.”

While the price points, and lack of price reductions, may be keeping potential new Buyers at bay, current residents have reason to smile. Berkeley Investments has yet to cut prices to the point where current residents are stuck with negative equity in their units, an unfortunate reality for some Bostonians who buy early at new luxury condo developments. It’s a balancing act to try and buy the specific unit that you desire in a new condo development early in the preconstruction sales cycle, but at the same time, avoid buying in too early so as to avoid (oftentimes inevitable) developer price reductions on future unsold units that will ultimately bring palatable building price points below preconstruction levels.

“I don’t think they need to do much more. Their marketing looks pretty good to me, I don’t know their traffic, but they are noticeable, at least in the brokers community,” states Bushari.

Heading into the winter months, there are currently two units (210, 217) Under Agreement at FP3 Boston, both units at the lower end of the price scale in the building with a studio and a one-bedroom listed at  $349,000 and $449,000 respectively – FP3 condo fees
do include concierge services.

FP3 Boston Lofts Lobby

Comments

  1. Hmmmm. Is anything being built that isn’t the “new definition of luxury”?? 🙁

  2. Boston Condo Guy says:

    Specifically in the Seaport District, (at this time) FP3 sets a relative new baseline over the other surrounding (existing) developments.

  3. Wow, they want nearly $1000 per sq ft for the PH WITHOUT parking? What do they think they are selling? A new unit on Marlborough St? In this mkt, they will be lucky to get half that…what do you think a fair price is?

  4. Shouldn’t it be a rule that if a condo costs for than $1 million, it comes with a parking space? Oh, and better yet, not 2 blocks away.

  5. there is just far too much competition in the seaport district to support such prices w/o deeded parking in the building. 25 Channel Center for example packs far more value for dollar and its penthouses come with two large spaces. McCallan is also a better value. The FP3 units are nice, but not at 2006 prices.

  6. Tom Skahen says:

    Last January PrimeTime Communities published The 2008 Prime Report (A Comprehensive Study of Boston’s Residential Market and Factors which Impact It’s Viability). It can be found at http://www.PrimeTimeCommunities.com under research. The report provided detail on Boston’s key new construction developments in progress. This included a sales information overview for each development as well. At the time, 28 total units sold/under agreement we’re reported at FP3. The building had not been delivered at this point, so the sales reported were all agreements.

    We are in the process of publishing the 2009 Prime Report and have found 9 sales to date (with 2 additional agreements listed) or a .4 per month absorption. What have we learned? Agreements don’t mean anything. For the 2009 Prime Report we will provide “sales” closings only with an overview on agreements that may lead to additional sales.

    Overall, for Boston new construction we’re seeing monthly absorption rates as low as .1 and as high as 4.0. The detail will be released sometime in January of 2009.

  7. Thank you Tom. That is very interesting and helpful.

    I wonder if the 19 ‘agreements’ at FP3 that didn’t happen were all people who backed out (not a good sign for the project!) or misleading statements by the developer (which usually means lawsuits from the people who did purchase based on this false info is the next step).

    I would like to see the FP3 project be successful. But not if they are lying about their sales rates to prospective buyers.

  8. Lying about sales rates is not unusual. Numbers are not put in contracts giving sales agents the flexability to come up with any numbers they want.