Ultra Luxury Condo Sales Velocity Low

As the nation continues to rebound from recession, it is perhaps no great surprise that Boston’s three latest ultra luxury condo developments, 45 Province, the Clarendon Back Bay, and the Boston W Hotel & Condos, are struggling to drive sales velocity.  No condominium developer has a crystal ball, but those behind 45 Province, the Clarendon Back Bay, and the Boston W Hotel & Condos entered the market during an inopportune time in the natural ebb and flow of real estate cycles.  While overbuilding in Boston proper is not the culprit, vacancy is, with paltry building percentage sold numbers, almost all of which under 10%, facing the three developments that have arguably set a new baseline for luxury living in downtown Boston and have been a positive addition to the neighborhoods they occupy.

Aside from Atlantic Wharf (formerly Russia Wharf), a Boston Properties development that is scheduled to come online sometime in 2011, that carries with it some projected residential component, large-scale condo development in downtown Boston is halted.  The inherent goal of the underlying real estate cycle is to now consume the available inventory in the market, and financiers and developers, of a certain size, will theoretically not re-enter Boston until they see vacancy levels significantly drop.

While 45 Province, the Clarendon Back Bay, and the Boston W Hotel & Condos have all been marketed for more than a year, the Clarendon and W Boston only recently received their certificate of occupancy and opened to residents, and thus, 45 Province has had somewhat of a head start on its rivals, yet, the percentage of units sold in each building (according to LINK, one of two Boston MLS systems) struggles to break 10%.  The current statistics for the three luxury condo developments include:

45 Province
Condos Sold: 15
Average Sales Price: $1,501,817
Median Sales Price: $1,304,000
Average Price per Square Foot: $1,008
Percentage of Building Sold: 15 / 138 = 11%

Clarendon Back Bay
Condos Sold: 9
Average Sales Price: $1,131,333
Median Sales Price: $1,060,000
Average Price per Square Foot: $1,063
Percentage of Building Sold: 9 / 103 = 9%

Boston W Hotel & Condos
Condos Sold: 8
Average Sales Price: $581,250
Median Sales Price: $560,000
Average Price per Square Foot: $807
Percentage of Building Sold: 8 / 123 = 7%

These three titans of luxury living face different challenges than other recently built large-scale Boston condo developments.  Take the Macallen Building, Boston’s first large-scale 140-unit LEED certified (green) condo development, located in South Boston, which had a relatively slow absorption rate given its price point and unique characteristics.  45 Province, the Clarendon Back Bay, and the Boston W Hotel & Condos face a different challenge than educating buyers on the merits of green living and why a South Boston development warrants a relatively high price point, instead, the baseline of luxury living is tangling with the economy and overall consumer confidence, regardless of price point, and regardless of how insulated downtown Boston is to pan-US economic conditions, it will simply take time to make significant strides forward in occupancy or building percentage sold rates.

45 Province Boston Condos

Clarendon Back Bay Condos

W Boston Condos

45 Province Boston

Following the topping off party in June 2008 at 45 Province, one of Boston’s most anticipated luxury condo development projects, the public has quickly turned its attention to the planned early 2009 opening.  The 32-story high-rise on the foot of Beacon Hill in Boston’s Midtown neighborhood (steps from Downtown Crossing) can boast as one of the most comprehensive condo developments in all of Boston.  Read on for an updated review of the development, including sample listings, and exclusive photos.

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45 Province Boston Condo Development Photos

Boston’s latest Midtown luxury condo development, 45 Province, is steaming towards completion – target completion is April / May 2009. We’re excited to bring you the below exclusive time-series photos provided by one of our readers, Peter Carpi. You’ll see in the first photo below the crane rising over the soon-to-be structure of 45 Province, while the second photo displays significant progress made on the core of the 45 Province structure.

Check out these 45 Province sample listings (133 KB PDF) to get a feel for unit pricing, square footage and amenities. For more information, or to setup a tour of the 45 Province sales office, please contact us.

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45-province-2

45 Province Catches On

It’s been just over a month since we spoke about the ingenuity of live construction web cams at condo developments (see 1330 Boylston Mixed-Use Rental Development), or perhaps, their lack in the Boston market. One of the first mainstream developments to implement a live construction cams was Battery Wharf, when over a year ago, they implemented a mechanism where Buyers that had put a unit under reservation could keep tabs on how things where progressing at the job site.

Not only do Buyers who hold reservations at a new development want to see progress of their purchase, but potential Buyers and even those in the community tell us that a live construction cam overlooking the construction site is an innovative way to communicate with the Boston real estate market.

The development team at 45 Province must have heard the noise on the street, because they have installed a live construction cam recently (thank you to John Keith for bringing this to our attention). 45 Province is a development of The Abbey Group, and is being architected by Bruner/Cott & Associates.

So who is doing it? Unfortunately, only a handful of Boston condo developments have taken the leap:

  • Battery Wharf – if you can wait through their rather slow flash-based website to load at http://www.batterywharf.com, there will be a a link in the far left column of the landing page called “Click For Site Camera”. This link serves up 10 distinct views of the development site, all live, featuring the buildout of the Battery Wharf condo development, as well as the Regent Hotel.
  • 1330 Boylston – the mixed-use rental developments seem to be quite popular in the Fenway as of late, and 1330 Boylston is no different. We reported almost a month ago that this development was hosting a new webcam, the camera being perched atop a neighboring high rise, providing an excellent vantage point on the development.
  • FP3 Boston – the coveted anchor development in the Seaport District has implemented something similar to Battery Wharf in that they provide three separate shots of the development. The pictures are located by navigating to the developer’s website, clicking “Enter Site” on the lower left, hovering over the “Building” link title along the top of the screen, and then selecting the “Webcam” link. The FP3 Boston condo development is currently slated for a 2nd Quarter 2008 completion, and will add almost 100 high-end condos to the core of the Seaport, as well as an upscale restaurant.
  • 45 Province – the long awaited 45 Province condo development, which bull-dozed the famous Littlest Bar of Boston is the most recent addition to the live construction cam club by hosting a single (rather tight) view of construction at http://www.rc3online.com/news.html.

We hope to see this list grow considerably over the upcoming months. There are a number of new condo developments in various stages of build, and adding a webcam is a simple and effective way to allow an engaging relationship to flourish.

US Condo Downturn Troubles Lenders and Developers

The Wall Street Journal reported this weekend that in cities across the US, namely Miami, instances of foreclosure and condo development bankruptcy are increasing. The problems are emerging as some buyers who signed contracts to by new condos two to three years ago, when construction was just starting, seek ways to back out as they encounter trouble getting financing in the suddenly dicey mortgage market. Falling prices are forcing appraisals down, so banks aren’t willing to lend the full amounts that people committed to in the sale contract.

Boston appears to be bucking that trend slightly, or at least serving up a different flavor of the same end result. Consider that Bostonians continue to lay down large deposits on units in condo developments that are far off on the horizon, with what on the surface, appears to be little to no concern over obtaining financing when the occupancy date approaches, and final checks have to be written (take for instance the Mandarin Oriental, which is practically 100% sold, and will not open until June 2008, as well as 45 Province, which is on track for a 2009 completion, but is experiencing strong sales, and large deposits, thus far).

Where condo developments seem to be experiencing issues in Boston is not so much on the consumer financing end, or consumer demand for that matter, but on construction costs that have increased to levels that do not allow developers to turn a profit on making the project a reality. Take for instance, Columbus Center, which was approved years ago, but has not broken ground due to rising construction costs that erode project profit potential, the Broadluxe that is currently foreclosed upon by TD Banknorth for various construction cost related issues, the original Channel Center effort that saw a whole block purchased by a developer, only to see a small portion of the area developed, or perhaps most recently, the announcement that East Pier (Portside at Pier 1) in East Boston may flounder because developers anticipate not obtaining the profit levels for which they had hoped.

However, a broad brush stroke story on the state of the entire US provides little insight into the local market here in Boston. Despite the four above-mentioned condo development projects experiencing issues, be that temporary or permanent, construction still continues and will continue. Take for example The Clarendon and Russia Wharf (to name only two), both of which have recently broke ground on new construction in the Back Bay and on the Waterfront respectively.

With the little consistency that is seen (or unseen) in even the Boston market, it leads one to question whether the failure of certain condo development projects in the city are simply a result of particular developers seeking to take advantage of the demand from three to four years ago (the time when planing and permitting took place) , and a lack of planning and foresight to build proper safeguards into their projects.