Renovated Beacon Hill Condos at 73 Myrtle Street

August 31, 2009 By

Behind the Beacon Hill ordinances and regulations that extensively protect the historical integrity of neighborhood home exteriors, Bostonians would be surprised to know that interior renovation work is constantly happening inside the stately residences in one of Boston’s most premier neighborhoods.  The most recent addition to the Beacon Hill neighborhood is the complete interior renovation of the five units at 73 Myrtle Street, which have been listed for sale at prices ranging from $639,000 to $879,000 (average of $776 per square foot).

The building is comprised of a garden level 3-bedroom 2.5-bathroom duplex with its own private entrance, as well as four 2-bedroom 2-bathroom units with the penthouse capped with its own exclusive roof deck.  The gut renovation to the building at 73 Myrtle Street was completed over a period of 10 months by Zamok, Inc., a local real estate investment and development company. Zamok has been doing condominium developments in the Boston area for approximately 6 years, and recently branched out to a luxury single family development in Wellesley, MA.

While new projects, especially townhome and smaller condo developments, continue to be brought to market, developers are working on projects that can easily be distinguished amongst the available downtown Boston inventory.  “Buyers, in general, prefer renovated properties over those that need work. There is nothing else on the market on Beacon Hill right now that compares in terms of level of renovation and pricing to 73 Myrtle Street.  The 73 Myrtle Street units offer a buyer the opportunity to purchase a home that is move-in ready,” says Pauline Donnelly, Vice President of Coldwell Banker Residential Brokerage at 48 Charles Street, who represents the property as the exclusive Listing Agent.

When asked if there was apprehension on the developer’s part in approaching a gut rehab project in the current market, Donnelly stated,”A developer has apprehension about a new project in any market.  However, 73 Myrtle offers a quality product within reasonable price points and with attractive listing prices.  The Beacon Hill sales market is one of the most robust in the state and typically properties in this neighborhood hold their value more than other areas.”

The units at 73 Myrtle Street feature kitchens with granite countertops, stainless steel appliances, and gas cooking. Each unit includes a master bedroom suite with a walk-in closet. Additional features include central air conditioning, recessed lighting, and a washer and dryer hook up.

According to LINK, one of Boston’s to MLS systems, the average price per square foot for sold listings on Beacon Hill in the past six months has been $716, with an average days on market of 126.

73 Myrtle Street Beacon Hill

73 Myrtle Street Living Room

73 Myrtle Street Kitchen

73 Myrtle Street Bathroom

73 Myrtle Street Roof Deck

Filed Under: Beacon Hill Condos Tagged With:

360 Newbury Two-Bedroom Uniquely Shines

August 28, 2009 By

Availability in several downtown Boston condo developments remains somewhat elusive, and in the Back Bay, that would include two-bedroom units in the Belvedere, Trinity Place, and at times, 360 Newbury. On August 17, 2009, a two-bedroom unit in 360 Newbury sold for $1,085,000 ($709 per square foot), it had been since February of 2008 that another two-bedroom unit had been available in the contemporary large-window high-ceiling building that sits at the southeast corner of Massachusetts Avenue and Newbury Street.

It’s now down to a single condo available at the 54-unit 360 Newbury development, a 1,626 square foot two-bedroom unit that has a host of high-end upgrades, but that has been somewhat slow to sell possibly due to the custom upgrades and the upper echelon price per square foot into which the unit has been placed.

Unit 511 at 360 Newbury is currently listed for sale at $1,499,000 ($922 per square foot) and offers two-bedrooms two-bathrooms and boasts double exposure as a corner unit.  Arclinea cabinetry, Bosch, Miele, and Sub-Zero appliances adorn the kitchen, and a custom sculptural wood wall and custom foyer built-ins add uniqueness to the already award-winning 360 Newbury building architecture.

The custom upgrades abound, along with practical ones like electric window shades, but where unit 511 seems to be getting hung up is on the price point.  The three units that have sold in the building over the past 12 months have an average price per square foot of $741, while unit 511 is currently (after a price reduction in July) at $922.

Regardless of the exquisite upgrades and custom finishes in the unit, which do deserve a price premium over other units in the building, it’s no surprise that the sale of this particular unit is undergoing additional scrutiny by potential Buyers.

360 Newbury 511 360 Newbury 511

Filed Under: Back Bay Condos

Impact of New Condo Inventory

August 26, 2009 By

In response to a recent inquiry from a reader.

“Hello, I’m hoping you’ll be able to offer some insight regarding the state of new condo sales in Boston. I live in Phoenix where we are over saturated with new developments and sales have slowed dramatically over the past year. Are new sales slow in Boston as well? Thank you for your time!”

Boston is in somewhat of a unique position when it comes to the onboarding of new condo developments and the inventory they create. While Boston underwent rapid buildout of a host of new condo developments over the past 5 years, the building trend has slowed, and the city now has only a small handful of new buildings that are in the pipeline – the Boston W Hotel & Condos slated to open later this year was the final large-scale condo development to receive financing prior to the global economic crisis that began to hit the institutional lending markets in 2007 (see Boston W Hotel & Condos Readying).  That said, the market is what it is for the next 2-4 years, meaning, all of the inventory and potential choice is known by both Buyers and Sellers.

With that visibility, there are certain new (and recently built) developments that have a higher sales velocity than others, however, the wide breadth of choice in both building style and neighborhood has not stifled any one area of the downtown market, thus allowing for most new developments to be successful.  Some more so than others obviously, and the market is responding appropriately via supply and demand, with for instance an auction at the South End’s 1850 recently to clear remaining inventory, to recent price drops at FP3 to stimulate further absorption of remaining units in the new Seaport District development.

The one result of absorbing new condo developments into the market that is implicitly obvious but was not explicitly predicted is the abundance, perhaps overabundance, of resale listings at existing premier buildings that aren’t accustomed to seeing higher levels of available inventory and turnover.  As Bostonians make the “upgrade” to newer and slicker condo developments, they are leaving vacancies at a host of buildings that don’t typically have a host of for sale signs in front of them.  For instance, there are 18 units currently available for sale in One Charles that are priced from $495,000 for a 610 square foot studio to $3,990,000 for a 2,420 square foot penthouse.  One Charles opened its doors to residents only a few years ago, and was considered to be the new contemporary full-service place to call home on the edge of the Back Bay.  Strada 234, the North End / Waterfront luxury building, with 8 units currently for sale is matching some of its highest inventory levels for the past several years, with condos priced from $649,000 for a 1,088 square foot 1 bedroom 1 bathroom to $1,199,000 for a Dennis Duffy designed 2+ bedroom 2 bathroom unit.  And Four Seasons Place, the exclusive place to call home at 220 Boylston Street overlooking the Public Garden, currently has 6 units available for sale at the same time, perhaps 2 times higher than typical inventory levels, with units priced from $997,000 for a 972 square foot 1 bedroom 1 bathroom unit to $8,950,000 for a 4,022 square foot 3 bedroom 3 bathroom penthouse unit.

With new development delivery slowing, the downtown Boston market is absorbing the options with an “out with the old, in with the new” type attitude in some circles, yet the availability of inventory in existing buildings that is being created may very well provide the opening that others have been looking for to make a move of their own.  Regardless, because there is now visibility into what the market entirely has to offer, for at least the next 2-4 years as it relates to the addition of new large-scale condo developments, a premium will be placed on those with the ability to comprehensively and accurately compare and contrast downtown Boston properties so that Buyers and Sellers can make informed and educated decisions about what condo, and condo development, most appropriately matches their lifestyle.

Filed Under: Boston Condos

Laconia Lofts South End Open House

August 23, 2009 By

Laconia Lofts is one of the South End’s most sought after loft-style condo developments in the SOWA (south of Washington) area. Constructed in 2000, the lofts were originally unfinished when sold, and each has taken on a unique flair, comprising a dazzling set of unique spaces.

Unit 223 is a 2,116 square foot 3 bedroom 3 bathroom corner unit that boasts custom architecture, numerous upgrades, huge windows, and a single deeded garage parking space. The unit is priced at $1,199,000 ($567 per square foot), and has monthly HOA condo fees of $706.

The 99-unit development is capped by a common roof deck with stunning city views. An open house will take place at 1180-1200 Washington Street Unit 223 on Sunday, August 23, 2009 from 11:30 AM to 1:00 PM.

Laconia Lofts Unit 223

Laconia Lofts Roof Deck

Filed Under: Boston Open Houses Tagged With: , , ,

Meads of Commonwealth Back Bay Value

August 22, 2009 By

Several years ago, there was a stately redevelopment of the residences at 413-415 Commonwealth Avenue at the west end of the Back Bay.  The Meads of Commonwealth, originally constructed in 1890 as prestigious single family residences, were restored into 13 spacious and overflowing direct elevator access floor-through residences.

The Back Bay continues to become more populated with high-end luxury developments and remodels, yet with the latest price reductions that took place at the Meads this past week, several never before occupied units are being offered at extremely competitive price per square foot values.

Two units at the Meads of Commonwealth underwent price reductions of approximately 15%.  This move brought unit 1, a 2,820 square foot 3 bedroom 3.5 bathroom moved from $2,399,000 to $1,999,000 ($709 per square foot), which includes a single deeded garage parking space. Additionally, unit 6, a 1,835 square foot 2 bedroom 2.5 bathroom unit was reduced from $1,600,000 to $1,399,000 ($762 per square foot), however, it is not being advertised with a parking space.

According to MLSpin and LINK (Boston’s MLS systems), there have been no sales at the Meads in the past 12 months, yet, the previous 4 sales in the development were at an average price per square foot of $916.  The new price per square foot listing prices in the $700 range represent a significant move off of previously sold units in the building.  Units at the Meads have been advertised for sale for approximately 3 years, both during and after redevelopment.

Craftsmanship at the Meads is exquisite, and the flowing floor-through units offer an open feeling of living, oftentimes hard to find in a downtown condo. Perhaps the only amenity overlooked in this development is concierge services, yet the monthly HOA condo fees accurately reflect it, at levels under 35 cents per square foot.

Meads of Commonwealth

Meads of Commonwealth

Filed Under: Back Bay Condos

FP3 Boston Lofts Lower Prices on Several Condos

August 19, 2009 By

As Bostonians push through what has now become a hot summer in downtown Boston, FP3, a 92-unit loft-style condo development in the Seaport District recently dropped prices on several units in an effort to continue driving sales.

Earlier this week, two of the six units that represent the Seaport District condo development in MLSpin, one of Boston’s two MLS systems, were lowered in price by approximately 6%.  Unit 203, a 659 square foot condo representative of the studio units in the building was lowered to $329,000, and unit 218, a 1,183 square foot unit was reduced to $549,000.  These latest price movements bring some units on the lower floors of the development into the $400 price per square foot range.

FP3 has held its certificate of occupancy since late 2008, and Buyers are able to immediately move into units upon purchase.  According to LINK, Boston’s second MLS system, 21 of the 92 units in the building have been sold (23%).

Filed Under: Seaport District Condos Tagged With: , ,

The Slow Sucking Sound is Commercial Real Estate

August 17, 2009 By

I’ve had to rewrite my introductory paragraph three times in an attempt to not sound like a raging Chicken Little, but I must say this succinctly:

Commercial real estate, construction, and multifamily properties and projects are in a world of hurt. It is going to get worse. If there is any question as to value today simply rip the band-aid off quickly and take the pain.

There I said it. Indulge me for a few moments if you would. If you know anything about commercial real estate you probably know that values rest largely on three factors.

  1. Demand: How much more is one guy willing to pay than the next. In commercial real estate this is expressed as a cap rate generally. Cap rates are inversely proportional to value. Think of them as interest rates or simply rates of return. It’s the same as any other investment in that the cap rate speaks to the perceived risk in the location, asset type, tenant mix, etc.
  2. Building Fundamentals: How much money is coming? How strong are your tenants? How likely are you to keep the income? What upside is there? How desirable is the location?
  3. Leverage: To what degree is positive leverage available?

I’m sure I’ll get a slew of comments deriding me as simple or slow, but these factors are at the core of value; so let’s break it down. Demand from an acquisition standpoint is WAY off. I recently ran a survey of commercial real estate professionals, 200+ responded and investors believed cap rates would rise by 2.3% over the coming year. I’ll show you the math on this in a minute. That means that if you would buy at 7.5% today you’re putting that same property at 9.8% next year. Don’t fall asleep on me yet, this is going to get interesting, I promise.

Building fundamentals have mainly to do with who is renting your property and for how much. Across the board we are seeing reductions in rent by 20% and more. We negotiated, for ourselves, a rent reduction of more than 20%. Add to this increased vacancy and you can see where I’m going with point number two.

Leverage… suffice it to say that leverage has to do with the availability of borrowed capital, usually from banks or in the case of commercial real estate the CMBS market. If you haven’t been under a rock you know what I’m going to say.

Ready? Here’s the math. I was on a recent conference call where analysts at costar were answering the question “Is a 40-50% drop in values really real or is that some kind of inefficient market blip because the banks aren’t lending?” and their response was the question should be “Is a 75% loss of value really real?” …. that is what we’re talking about.

Check out the accompanying graph below to understand where commercial property values are going. This model uses a property that sold in 2007 with at a 6.5% cap rate, with a 75% LTV, on a 25-year amortization schedule with a 7% rate. It assumes the aforementioned cap rate decompression and a slow (5% after the first year then 10% in each of the 2 subsequent years, totally realistic) drop in NOI as a result of lower rental rates and higher vacancy.

Losing Money in Commercial Real Estate

Stay tuned for my follow up article where I’ll tell you the shocking truth about what’s happening at the banks right now and why it is going to result in a cascade of distressed commercial real estate opportunities coming to market and a slew of bank closures. I’ll tell you who the culprits are and what can be done.

Filed Under: Commercial Real Estate

Boston Apartment Rental Scam Exposed

August 14, 2009 By

“Regarding the payment, you will be instructed to deposit the amount to a Move.com Agent from [the] United Kingdom. They will hold and insure your money until you check the apartment and decide if you want take it or not. That is how their buyer protection policy works.”

An apartment rental scam is infiltrating Boston, and has largely focused on apartments in the Financial District, namely Broad Street, according to several potential victims who have provided details of their ordeals.

The scam ensues by luring potential renters to respond to a Craigslist advertisement for a high-end Financial District condo that is being offered for rent at a very (unreasonably) attractive price.  The landlord claims that they are in a foreign country, and that in order to preview the unit, the keys will be sent to the prospective renter after a deposit is made – the landlord claims that the “only problem is that I`m the only person who has the keys and I have nobody in [the] United States that could show you the condo. In order to check [it out]”.  To get the keys, the renter must provide a deposit to the landlord, which is facilitated by a website (move.com),  and once the website is holding the funds it is claimed that the keys will be sent.  The landlord claims that “If you do not want to rent the apartment the funds will be returned to you”.  Luckily, we are not aware of any renters who went so far as to send a deposit.

In the most recent account, a potential renter was responding to an advertisement for a unit at the Folio (a full-service luxury condo development) located at 80 Broad Street in the heart of Boston’s Financial District.  A two-bedroom two-bathroom condo was being advertised for rent for $800 per month.  There were several context clues in the advertisement and email exchange that followed between the renter and landlord that pointed to the fact that this was a scam.  For instance, Folio opened to residents in 2006, however, the landlord states in email communication that they have lived in the unit for 5 years.  The pictures of the unit, while they represent a higher-end condominium, do not accurately reflect the Folio’s interiors.  Lastly, no unit number was provided in either the advertisement or any follow on communications, and monthly rent at $800 is unheard of in the downtown Boston market.

There are legitimate rental units available in the Financial District currently, but nonetheless, renters should proceed with caution should they experience anything similar to the apartment rental scam experienced recently by several Bostonians.

Filed Under: Boston Rentals

Mortgage Loan Modifications Gain Popularity

August 13, 2009 By

If you have fallen behind on your monthly mortgage payments and are faced with foreclosure, a mortgage loan modification may be a viable solution. What is a mortgage loan modification? Simply put, it is not a new loan; but an agreement between you and your lender to modify one or more of the terms of your existing mortgage thereby allowing the loan to be reinstated.

While each lender’s program is unique, typical modifications result in the negotiation of a lower interest rate, a fixed rate mortgage, and/or lower monthly payments. The end goal of both the mortgagor and the bank is a payment that the mortgagor can afford, thus facilitating keeping them in the home.

There are countless entities who offer mortgage loan modifications, however, your attorney will be best suited to negotiate the modification and explain its benefits and risks to you given the fact that a mortgage loan modification will result in new legal rights and obligations with respect to your existing mortgage.

With respect to legal fees, foreclosure costs, and late charges, lenders are permitted to capitalize legal fees and related foreclosure costs into the modified principal balance. However, late charges should be waived at the time of the loan modification.

Before contacting your attorney regarding a mortgage loan modification, it’s best to gather some preliminary information:

  • the name of your current lender
  • your current lender’s contact information
  • the loan number
  • a brief summary of the current state of the loan
  • any documentation that supports evidence of an economic hardship

Preparing this information in advance will provide your attorney with all of the information necessary to negotiate a modification with your lender, thereby expediting the process.

Filed Under: Mortgage Information

W Boston Goes from Big Hole to Shiny Facade

August 12, 2009 By

It was just over a year and a half ago that 100 Stuart Street was a large hole, the soon to be site of the Boston W Hotel & Condos (see Boston W Hotel & Condos Construction Photos).  Previously an open-air single-level parking lot that served Boston’s Theatre District, the site had been slated for the development of a hotel and luxury condos for years – the Boston Redevelopment Authority (BRA) originally approved the proposed hotel in June of 2001, then known as the Loews Hotel Project.

Boston W Hotel Construction Site - January 2008

It was less than a year later on October 24, 2008 that the W Boston put the final piece of steel in place and the development “topped off”.  The development is now quickly approaching the October 2009 launch of the hotel, and Buyers are anticipating the opening of condos late this year and early 2010 in the multiple-phased rollout of luxury condos.  The Boston W is a $200 million mixed-use project, which includes a 235-room hotel, 123 residential condos, retail, restaurant and spa use, and 142 underground parking spaces.  Condos at the W are currently price from $430,000 – $4,550,000.

Boston W Hotel Construction Site - July 2009

Filed Under: Theatre District Condos Tagged With: , , ,
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