Exclusive Broadluxe Auction Interview

February 4, 2009 By

Monday marked the completion of developer unit sales at Broadluxe, which represents one of the shortest building sales cycles in some time.   We had the chance to catch up with Brecht Palombo, Broker and Auctioneer of Tranzon Auction Properties, who played an integral role in the auction of Broadluxe, and post auction sales coordination. Broadluxe, a 44-unit loft-style condo development in the heart of the Financial District, was brought to auction on June 21, 2008 after a short marketing blitz.  The event was the most significant Boston condo auction of 2008, and was considered a success by many after Tranzon was able to sell 60%+ of the property on auction day, as well as making quick work of the remaining units for sale in the building post auction.

Can you tell us a little about Tranzon and your role with the firm?

Brecht Palombo: Tranzon is the premier national network of independently operated real estate auction firms. Tranzon Auction Properties operates throughout New England with a headquarters in Portland Maine and with my offices in Lexington Massachusetts. My team in Lexington is responsible for driving new business relationships in Massachusetts, Rhode Island and Connecticut and we service all of the southern New England auction business that’s written out of our headquarters.

How were you involved in the Broadluxe auction process?

Brecht Palombo: I was intimately involved with every aspect of the Broadluxe auction process starting with communicating with the developer when he was in default back before any real foreclosure proceedings began, through every aspect of the foreclosure auction, then through every aspect of the REO auction and finally I handled all of the negotiated sales of the remaining units after the auction. I worked with the lender, debtor, and lender’s counsel at Riemer and Braunstein etc. I was deeply involved.

What were some of the main factors that contributed to deciding when the auction took place, how long the property was open to the public before the auction, and the mechanisms by which you marketed and promoted the sale?

Brecht Palombo: The client determines when an auction takes place based on their business needs. The campaign lasted 27 days. The auction process is about controlling time and terms. The auction marketing process involves a broad, deep, and rapid exposure to the market on a very condensed time frame. In this case we relied heavily on technology, specifically a variety of online marketing initiatives, to promote the sale.

Was the auction considered a success, and if so, why?

Brecht Palombo: Absolutely. An auction is about a rapid recovery of capital. This campaign recovered two-thirds of appraised value in the first 30 days and recovered a total of 93% of the appraised value in 180 days according to the lender’s own internal documents. I’d point out that the appraisals we are working from were done in April/May of 2008, and Boston condo prices in this area have fallen during that time.

What was the biggest surprise that you ran into on auction day?

Brecht Palombo: There weren’t too many surprises but I guess I would say that what we saw was a number of successful bidders decided on the spot that they wanted to buy more than one unit and they weren’t prepared. We had to work with our client to accommodate them but I don’t think our flat-footedness on this item was apparent to bidders and it did allow us to sell several more units at the auction.

Broadluxe Lofts - Boston Financial District Condos

You’ve had listing experience (for individual homes), how much faster do you think the auction process and ensuing post-auction sales process sold these units versus the sales center approach we typically see in Boston?

Brecht Palombo: You folks may be better at answering that question than I am. How long would it take to bring a 44-unit building to market from zero to sold out in 2008? We sold 66% in 30 days, 80% in 90 days, and finished them off in less than 180 days. Have you seen any other new projects sell out in 6 months?

What was the reaction of the broker and agent community to the auction, and how do you think that those constituencies helped or hurt the auction?

Brecht Palombo: The reaction was mixed. I think some agents chose to ignore the project for whatever reason but there were a small number of agents who were very active and sold a number of units . MLS rules and regulations forbid us from entering every auction we conduct in the system but we almost always encourage broker participation unless our client forbids it, even then we’ll push back. We believe that embracing the brokerage community is in the best interest of our sellers. Brokers definitely contributed to our success.

What was one of the biggest lessons learned from the Broadluxe sales process?

Brecht Palombo: When we were first going to bring these units to market there was a lot of internal debate about how to get people there. There are a variety of methods at an auctioneer’s disposal. In the end we decided to go with guaranteed-sold published minimum bids. This meant that if you showed up and bid you were guaranteed a sale unless you were outbid. Our numbers were good for that day only. As I look at the success and failure rates of the various condo auctions over the last year, I think it’s pretty clear the bidding public approves of this message.

Do you foresee further development-level auctions (in Boston) similar to Broadluxe in 2009?

Brecht Palombo: Well we sure hope so… but if you’re asking if I see more lenders and developers embracing the auction process to eliminate inventory in 2009 the answer is a resounding yes.

Filed Under: Financial District Condos Tagged With: , ,

Snowed In? Garage Parking Spot Investment Looks Clear

January 25, 2009 By

While supply and demand is the economic concept that resonates with most people, drilling further into that cornerstone of economics and looking at  economic scarcity, when availability is not enough to meet demand, is becoming more poignant in light of Wall Street’s meltdown, as well as the lack of melting snow. The investment merits of garage parking spaces to diversify and stabilize your asset pool, and prevent a complete time sync of shoveling your car out of a giant snow pile, is on the rise in Boston and across the country.

A cornerstone of finance is the concept of diversification, and with the S&P 500 down almost 40% in 2008, consumers and investors are on the lookout for assets that will simply hold their value, let alone appreciate.  Garage parking spaces have have become more attractive in the current financial market, and provide the diversification and potential future appreciation for several reasons.

Too many, or too few, parking spaces in Boston?

Looking at supply and demand, at the condo development level, it’s important to note that not all condo developments have parking garages (take Broadluxe for instance) and many condo developments have more condominiums than parking spaces in their garages (take Strada 234 for instance).  At the rowhouse level, say, in the South End, you typically see two outdoor parking spaces assigned to each address, but sometimes none, that being a function of rowhouses at one time serving as single family townhomes, and the availability of street parking (for residents) in some neighborhoods. That said, excluding the transient influx of parking demand for city employees and college students, parking spaces, especially garage parking spaces, are a scarce resource in Boston.

Do Boston Parking Spots Appreciate in Value?

Back in 2004, the Boston Globe put together an article (see Value soars on choice Hub parking spots) about parking spots at the Beacon Hill Brimmer Street Garage that were fetching $160,000, which at the time was quite monumental.  In 2008, parking spaces at the Brimmer Street Garage were selling for $250,000.  From 2006 highs, both median and average prices for deeded parking spots in Boston are again on the rise.  With the volatility in the financial markets, appreciation appears to be somewhat of a (bonus) afterthought notes a recent Wall Street Journal article (see When Stocks Tank..) that highlights consumers abandoning stocks and bonds and seeking refuge in unusual alternatives, including, parking spaces.

Snowed In Boston Parking Spot

And then there’s the convenience factor.  Regardless of whether you have direct access garage parking in your building, or if you have to walk outside to get to a garage parking space, finding your car cozy and warm with no snow, and no snow plow drifts, on your car is a nice feeling.

How to pick a garage parking spot?

Even within a parking garage itself, there are several factors that contribute to a parking spot’s value, namely, is it a corner or end spot, which increases the number of resale Buyers who would purchase the spot, especially those with high end automobiles.  Additionally, security, heat, level / floor (specific to multi-level garages), and proximity to an elevator all factor into the value. Finally, consider the popularity of the condo development (if applicable) associated with the garage, a popular location and building only increases the value of an investment in a parking space, versus making a purchase in a building not yet completely sold out or rented.

Snowed In Boston Parking Spot

Filed Under: Boston Parking Spaces Tagged With:

Boston Property Taxes Decrease in 2009

January 23, 2009 By

Property taxes in Boston continue to decrease, with a 2009 tax rate of $10.69 per $1,000 of assessed value, down from last year’s $10.97 per $1,000 of assessed value.  Assessed values appear to be staying steady, which equates to a decrease in an absolute sense for taxes paid by downtown Boston homeowners.  Additionally, residents who maintain their Boston home as their primary residence qualify for a residential exemption, lowering tax bills by as much as $1,500+ per year.  For an up to date example of how to calculate taxes for your condo, as well as a historical look at tax rates in Boston, visit our newly updated Boston property taxes article.

Filed Under: Boston Tagged With:

Harborview Navy Yard High End Rentals

January 21, 2009 By

The saga that was Harborview at the Navy Yard in Charlestown finally came to a close this fall as Roseland Property Company decided to stick with rentals, but the changes and confusion haven’t stopped. Originally priced between $3,050 and $5,500 for two bedroom rentals, management decided to lower its price to a more reasonable $2,800 for all of its two-bedroom units. While waterfront property is hard to come by in Boston, it’s no surprise to me that renters weren’t flocking to the property at $3,050 for their street-facing units.

Harborview at the Navy Yard

The reason for this was two-fold. First, the economy of course has had its impact on rents in Boston and was bound to trickle into the luxury market as executive and associate level unemployment has accelerated. Secondly, management’s offer lacked a differentiating factor to attract renters who might otherwise call Archstone Boston Common, West End Apartments or the like, their home. Some of the West End Apartments boast amazing Charles River views and the panoramic outlook from higher floors at the Archstone are hard to beat, so the water views are not enough of a factor amongst the competition. Also, despite condo quality units, their prices were the same or even more than most luxury apartment buildings in (downtown) Boston, and they had a less desirable location for commuting renters (in my experience renters have tended to be even more concerned with public transportation access than Buyers of for-sale condos).

Harborview at the Navy Yard

Harborview at the Navy Yard Rentals Now Discounted

However, things have changed at the Navy Yard. Rent was reduced to below market for luxury apartments, underground parking is now included – as are all utilities except for electricity and cable, and harbor views became affordable. After all, who wants to rent at the Harborview at the Navy Yard without a harbor view?

Harborview at the Navy Yard

Don’t believe that these deals will last. It’s normal for luxury apartment complexes to offer free months rent and other incentives to woo renters in the dull winter months. For instance, the Watermark, a luxury residence in Kendall Square, was offering its renters two months free rent if they signed a lease by January 1st and the West End Apartments are also currently offering reduced rent for winter leases. I expect that the spring will bring the rents back up in the low $3,000 range for two-bedroom units at the Harborview, but they will likely keep the parking incentive as long as there stands the availability to do so…We all know how valuable parking is in Boston, especially underground and Roseland would be keen to keep this advantage intact even after the slower season.

– Jay Alberino is the Founder & CEO of Eleven Park Realty, and has recently launched myCityApartment, a guide to houses and apartments for rent in Boston, Brookline, and Cambridge. Jay can be contacted to stay up to date with prices and offers, or to take a tour of Harborview at the Navy Yard or other luxury apartments in Boston.

Harborview at the Navy Yard

Filed Under: Boston Rentals Tagged With:

Allele South Boston Sales Velocity

January 16, 2009 By

After opening to residents in 2008, the Allele condo development in South Boston, which fuses standard housing features with those of typical lofts, has been somewhat slow to sell, perhaps a function of maintaining strong price per square foot values, competition from other condo developments in the immediate area that offer different living styles, and even the ups and downs that the financial markets have had on Buyers’ pocket books.

The current sales statistics for the building (below) evidence that the Allele sales team is remaining steadfast in positioning the value and price of the new development, and while the building is less than 20% sold, current residents have not been severely impacted by price reductions to the point where they find themselves stuck with negative equity in their units – a similar protective stance on behalf of early adopters is taking place at FP3 as well.

  • Number of Listings Sold: 9 of 48 (19%)
  • Average Sales Price: $627,889
  • Median Sales Price: $519,000
  • Average Price per Square Foot: $446

Two additional units (107 and 406) are currently Under Agreement, which would bring the percentage of building sold to 23%.  Parking spots in the onsite garage are being marketed as available for sale (and separate from the sale of a condo), and price points for remaining units are being maintained at levels of the previously sold units.

The Allele is not entirely alone in seeing slow sales velocity in the downtown market, however, there are other condo developments in the city (285 Columbus Lofts for instance) that have performed quite well in the volatile financial markets of the past 1.5 years.

Allele Boston Condos

While the new condo developments (Allele, Macallen, Lofts at 36 A) near the Broadway Red Line T-Stop are different on many accounts, HOA fees, and the amenities and services that those fees support, have been something that is talked about at each development, and a side-by-side comparison is warranted in order to ferret out if there are any real differences.

By putting together the below table, we have taken a look at units that are currently on the market at the three developments, and calculated the HOA fees on a price per square foot basis to help facilitate comparison.

Development

HOA Fee / Square Foot

What’s Included

Allele

$0.34

Heat, Hot Water, Gas, Water, Sewer, Master Insurance, Elevator, Landscaping, Snow / Refuse Removal

Macallen

$0.40

Heat, Hot Water, Gas, Water, Sewer, Master Insurance, 24-Hour Concierge, Swimming Pool, Elevator, Exterior Maintenance, Landscaping, Snow / Refuse Removal, Recreational Facilities, Exercise Room, Garden Area, Screening Room & Kitchen

Lofts at 36 A

$0.22

Water, Sewer, Master Insurance, Elevator, Exterior Maintenance, Snow / Refuse Removal

While breaking the numbers down in such a way makes it easy to see that the Lofts at 36 A have the lowest HOA fees on a price per square foot basis, and the Macallen Building the highest among the three, one needs to read between the lines in order to gain a truly fair comparison.  Simply put, the difference in fees is a function of what’s included or covered by that fee, however, it’s a nonlinear comparison.  The Lofts at 36 A truly have low HOA fees, and the construction of the building aids in keeping prices of certain amenities (heat for instance) in check, while on the higher end of the fee structure, the line is somewhat blurred between Allele and the Macallen Building, yet the Macallen Building has, by far, the most comprehensive amenity list in the area.  The energy efficient nature of the Macallen Building obviously helps keep fees low, but the economies of scale, given that the Macallen Building is almost three times the size of Allele, also plays a major role.

Allele South Boston

After much anticipation, the  Franklin  Cafe opened on the ground floor of the Allele, yet, that too has gotten off to a shaky start.  In early January 2009, reports were released that portions of the internal ceiling in the restaurant collapsed.  The incident caused approximately 8  people  to  be transported to the  hospital, none with life  threatening injuries. Boston Fire Spokesman Steve MacDonald stated the Franklin Cafe roof collapse occurred at the 152 Dorchester Avenue location just after 10 pm on January 3, 2009.  MacDonald stated that decorative panels attached to the ceiling may have caused the collapse, though a full investigation is underway.

Filed Under: South Boston Condos Tagged With: , ,

Macallen Listing Stands Alone

January 13, 2009 By

Not long ago, all of the remaining developer units at the Macallen were removed from the Boston MLS and LINK systems.  The sales staff at the Macallen continues to show units via direct appointments, but does not currently appear to be soliciting sales via the broker community.  In light of this current, and more than likely temporary, situation there is only a single unit listed for sale at the Macallen Building via the MLS systems of Boston, and it just underwent a significant price reduction, making it the most attractive (figuratively and literally) condo in the 140-unit development.

Unit 206 is an 801 square foot south-facing unit on the 5th floor that is currently configured with a sleeping alcove, but could easily be converted into a true one-bedroom.  The Macallen Building, and its sister development, Court Square Press, are stacked with amenities, and given the economies of scale with the two buildings, access to these amenities is kept reasonably low with a $396 monthly HOA fee.  Originally listed at $448,800, the Seller recently reduced their asking price to $419,900.

The first open house at this new price point will take place Sunday, January 18, 2009 from 1:00 PM to 3:00 PM.

Macallen Building 206

Macallen Building 206 Kitchen

Filed Under: South Boston Condos Tagged With: ,

Seaport District Million Dollar Open Houses

January 11, 2009 By

If you can dig yourself out of the snow drifts after Saturday’s winter storm, or if you park your car in a garage parking space, the Seaport District is hosting two $1 million+ luxury loft open houses that will be sure to impress.

Channel Center Condo 401

On Sunday, January 11, 2009 from 12:00 PM to 2:00 PM, Unit 401 at 35 Channel Center Street is being held open.  The listing is a stunning loft recently featured in Boston Magazine located in the hot Fort Point Channel neighborhood. Designed by a notable Boston architect and design team, this showcase two-bedroom two-bathroom home was designed with the finest materials and a multitude of custom features including expansive living and dining rooms, generous master bedroom with large dressing area/closet system and spa like bath, open granite/stainless kitchen featuring a large island and abundant storage. Direct access deeded garage parking included.

Unit 401 at Channel Center is listed at $1,190,000 for 1,914 square feet ($622 per square foot) and has monthly HOA fees of $839.

Fort Point Place Condo 622

Additionally appealing is Unit 622 at Fort Point Place (21 Wormwood Street), which is being held open during the same time frame on Sunday, January 11, 2009 from 12:00 PM to 2:00 PM. The listing at Fort Point Place is a truly unique contemporary brick and beam corner Penthouse Loft featured in Design Magazine, with over 2,000 square feet of living space. Kitchen & Master bathroom finishes, tile and lighting from Italian design and all imported from Italy. Spiral up to a 270 square foot private roof deck constructed with Special IPE environmentally friendly wood designed by Beth Whittaker. Juliet Balcony in living area, and southeast exposures offer an abundance of natural light within. Single deeded garage parking space included.

Unit 622 at Fort Point Place is listed at $1,199,000 for 2,058 square feet ($583 per square foot) and has monthly HOA fees of $622.

Filed Under: Boston Open Houses Tagged With: , ,

Exposing Boston Open Houses

January 10, 2009 By

As a Seller of real estate in Boston (or any city for that matter), one of the most effective mechanisms to get your home sold is exposure.  Given that 85%+ of consumers start their real estate search online, it makes a lot of sense that a property has maximum exposure online, however, good old fashioned open houses still have their place.

“Knowing that people can walk through my condo, in addition to seeing it on the web is important to me,” says one South End condo Seller.  Open houses, typically held on Sundays in the early afternoon, give potential Buyers an opportunity to touch and feel a property first hand, something that can’t be accomplished online.

So how do Buyers find out about open houses?  Through websites like this one, through word of mouth, and also, Boston Homes Newspaper and the relatively new Boston Courant Real Estate Guide, both of which are published and distributed on Saturdays in preparation for open houses that will take place over the next several days, but most oftentimes, on that Sunday.  The Boston Courant edition went through a significant overhaul in outward appearance during the new year, and now looks eerily similar to Boston Homes.

Boston Open Houses

However, open houses don’t magically appear in these print editions, a Boston Listing Agent must feed information into two separate property databases in order to push information into Boston Homes and Boston Courant (LINK and MLSPIN respectively).  As a Seller, you want your open house to be listed in both print editions to garner the most exposure possible.  That said, a Listing Agent must know that they need to submit open house information to LINK and MLSPIN by Thursday at Noon for an open house that will take place on the following Sunday, or the open house will not make it into the print editions.

The two property systems (unfortunately) carry different information and are not always congruent, notably, LINK boasts approximately 300 open houses this weekend (at the time of writing), while MLSPIN shows that there will be approximately 295.

Filed Under: Seller Advice

1850 South End Lofts Still Selling

January 6, 2009 By

It had been several months since a loft-style condo had closed at the 1850, a new 60-unit condo development on the southern border of the South End, but with two closings in December, the building is now more than 1/3 sold.

Selling prices at the 1850 South End have stayed relatively close to their original list prices, with only a small handful of the units being sold for less than list price, pushing up the sales to list price ratio to near 100%. Summary sales statistics at 1850, where units started going Under Agreement in early 2008, include the following.

Units Sold: 21 of 60
Average Sales Price: $351,395
Median Sales Price: $369,000
Average Price per Square Foot: $447

Sales to list price ratios, specifically at new developments, should be taken with a grain of salt, however,”pricing of a new development is more an art than a science,” says John Keith, a local real estate agent. “Unlike other new developments where all the units were listed for sale (in the MLS), here they are wisely releasing them over time, apparently being able to keep the building looking attractive from a price perspective.”

The Boston MLS currently shows lofts at the 1850 listed from $329,000 for 732 square feet to $565,000 for 1,148 square feet.  There is a parking lot adjacent to the building where spots are being made available for sale separately at $39,000 each.

1850 South End

1850 South End Kitchen

Filed Under: South End Condos Tagged With:

2008 Boston Parking Spot Numbers

January 4, 2009 By

With the start of a new year, we now have visibility into summary statistics for deeded parking spaces that sold in downtown* Boston during 2008.  Both average and median sales prices for Boston parking spots increased in 2008 over 2007 numbers.

2008
Number Sold: 93
Average: $80,459
Median: $65,000
Average DOM: 112 days

Approximately 20 $100,000+ parking spot sales in the Back Bay, Beacon Hill, South End, North End, and Waterfront bolstered sales figures in 2008.

2007
Number Sold: 117
Average: $71,865
Median: $40,000
Average DOM: 73 days

2006
Number Sold: 53
Average: $93,225
Median: $75,000
Average DOM: 202 days

*Downtown Boston includes the following neighborhoods: Back Bay, Beacon Hill, Chinatown, Fenway, Financial District, Leather, Midtown, North End, Seaport, South Boston, South End, Theatre District, Waterfront, West End.

Filed Under: Boston Parking Spaces
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