Batterymarch Insider

Batterymarch Group LLC is a full service independent real estate brokerage firm specializing in the downtown Boston market. More about our services here. “The Batterymarch Insider” is a brief snapshot of our current market thinking. As always, our “terms of use” apply. We encourage you to subscribe.

Paying Huge Premiums for Back Bay Redevelopments – This Won’t End Well

“We expect to see this pattern repeat itself in coming years as owners of these high cost units hit the exits.”

Property Spotlight – On the Market

  • 220 Boylston St., unit 1014/1016 – Holy Price Cut Batman!  – Offered at $3.725 Million
  • 166 Marlborough St., unit1 – Taking a Loss on Marlborough Street – Offered at $4.15 Million

Well Bought/Well Sold

  • 82 Mount Vernon St., unit 1 Will the Third Time be the Charm? – Well Bought
  • 54 Pinckney St. – Size Matters, Too Much Money – Well Sold
Paying Huge Premiums for Back Bay Redevelopments – This Won’t End Well
Boston Back Bay Townhouse
305 Commonwealth Avenue Boston Back Bay.

New construction sales in boutique Back Bay buildings often leave us scratching our heads. Buyers routinely pay substantial premiums over the prevailing market, with $3,000+/sf now commonplace. In our commentary, we often ask – how will the market receive those overpriced units when they come up for resale? A look at what’s going on with unit 2 at 305 Commonwealth Avenue gives us some insight.

By way of background, we did an in-depth review of unit 2 last November, so we won’t repeat all the details here (see “A Solid Back Bay Duplex, With a Lofty Price Tag”). We concluded that there’s a lot to like about this apartment, but we did have some caveats, most notably the fanciful valuation.

Batterymarch Insider

Batterymarch Group LLC is a full service independent real estate brokerage firm specializing in the downtown Boston market. More about our services here. “The Batterymarch Insider” is a brief snapshot of our current market thinking. As always, our “terms of use” apply. We encourage you to subscribe.

Special EditionNew Development

“The 600” – Ready or Not, Here They Come!

In our mid-year review (see here), we highlighted three high-profile new developments that will be ready for delivery in late this year and early 2023. The St. Regis (Seaport – 114 units), Winthrop Center (Downtown – 314 units), and Raffles (Back Bay – 146 units). Collectively, there are about 574 brand spanking new units hitting the market all at once – or what we refer to as “The 600” (yes, we’re rounding up).

“The 600” – St Regis, Raffles, and Winthrop Center

It’s unusual to have three large scale luxury developments coming to market at the same time, particularly in the context of all the new developments in the last decade. Despite the fact that these properties are in three distinct downtown neighborhoods, these developers are targeting the exact same pool of “luxury buyers.”

Batterymarch Insider

Batterymarch Group LLC is a full service independent real estate brokerage firm specializing in the downtown Boston market. More about our services here. “The Batterymarch Insider” is a brief snapshot of our current market thinking. As always, our “terms of use” apply. We encourage you to subscribe.

Condominium Fees – Are You Getting Your Money’s Worth?

“An employee hanging around in the lobby accepting Amazon packages and parking your car doesn’t make it a full service building.”

Property Spotlight – On the Market

  • 16 Exeter Street, unit 1 – Is It Us, or Is This Unit Always for Sale?  – Offered at $5.45 Million

Well Bought/Well Sold

  • 25-27 Commonwealth Ave., unit 27  Bellwether Property Trades Off Market – Well Bought
  • 274 Beacon Street, unit 7R – Nice Co-Op, Reasonable Valuation – Well Bought

Condominium Fees – Are You Getting Your Money’s Worth?

Condominium fees are a fact of life in the downtown market. Like everything else, you get what you pay for – or do you?

The best way to get an apples to apples comparison of fees is to divide the monthly fee by the unit’s square footage, e.g., a 1,000 square foot unit with a monthly fee of $500 would be .50 cents/square foot a month. This example is what you’d expect in a no bells and whistles non-elevator Back Bay or Beacon Hill condominium.

Batterymarch Insider

Batterymarch Group LLC is a full service independent real estate brokerage firm specializing in the downtown Boston market. More about our services here. “The Batterymarch Insider” is a brief snapshot of our current market thinking. As always, our “terms of use” apply. We encourage you to subscribe.

First Half Review – In With a Bang, Out With a Whimper 

Note: This article first appeared in Banker and Tradesman.

As we close out the first half of 2022, the Batterymarch Back Bay Index© (BBBI) registered a year-to-date price gain of 8.9% on a 31% decline in transaction volume. This compares to a modest 2.6% price gain on a 24% increase in transaction volume for calendar year 2021. For more on the BBBI and our methodology see here.

Batterymarch Insider

Batterymarch Group LLC is a full service independent real estate brokerage firm specializing in the downtown Boston market. More about our services here. “The Batterymarch Insider” is a brief snapshot of our current market thinking. As always, our “terms of use” apply. We encourage you to subscribe.

Vanishing Views – Buyer Beware

“Views shouldn’t be taken for granted. With all of the construction projects in the City, many people are learning this lesson the hard way.”

Property Spotlight – On the Market

  • 95 Beacon Street, unit 6/7 – Timeless Tradition on the Public Garden – Offered at $6.495 Million

Well Bought/Well Sold

  • 260 Beacon Street, unit 5 – Hideous Building, Decent Unit – Well Bought
  • 100 Beacon Street, unit 1C – Great Property, But the Fees? – Well Sold
Vanishing Views – Buyer Beware
Motor Mart Garage Source: BPDA

Good views are universally at the top of most buyers’ wish lists. Views are especially important with high-end urban property. Everyone wants to look out over something pleasant – water, distant skyline, or green space. If you’ve got good views, chances are pretty good that you’ll also get good natural “light and air,” critical components of luxury property. Views shouldn’t be taken for granted, and with all of the construction projects in the City, many people are learning this lesson the hard way.

We recently toured unit 1612 at the original Four Seasons on Boylston Street. The unit, which is offered at $5.999 million (2,216/sf), was a disappointment to us. Without going into the details, it’s pretty much as it sat when it traded back in 2015 for $3.8 million ($1,376/sf) (it subsequently traded again in 2018 for $5.4 million). It’s been on the rental market for the last few years and in our opinion is a bit long in the tooth.

The Ayer Mansion

The Real Estate “Dark Web” and Fiduciary Duty – Strange Bedfellows

This is the first of a two part opinion series on the Ayer Mansion (Terms of Use apply). In part one we examine fiduciary obligations in real estate transactions. In part two we will dive into the valuation of historic properties, “Art – an Investment or a Home?”

The Ayer Mansion – Back Bay

Located in the outskirts of Boston’s Back Bay on Commonwealth Avenue, the Ayer Mansion got our attention when it changed hands in an “off market” transaction last December. The $12.5 million purchase included two buildings, 395 Commonwealth (Ayer Mansion) and the neighboring building, 397 Commonwealth. We were surprised by the low price and when we learned that the seller was a non-profit entity and the buyer was a sophisticated real estate developer, our fiduciary antenna shot up.

According to a Wall Street Journal article, the buyers of the property were Boston based Sea-Dar Construction and CNW Capital Partners. The seller was the Trimount Foundation, a non-profit corporation affiliated with the Catholic organization, Opus Dei. The original asking price for both buildings was reportedly $22.5 million.

Batterymarch Insider

Batterymarch Group LLC is a full service independent real estate brokerage firm specializing in the downtown Boston market. More about our services here. “The Batterymarch Insider” is a brief snapshot of our current market thinking. As always, our “terms of use” apply. We encourage you to subscribe.

New Development Review

The Archer – 45 Temple Street – Beacon Hill

Property Spotlight – On the Market

  • 142 Chestnut Street, unit 8/9 – A Great Flat of the Hill Duplex

Well Bought/Well Sold

  • 129 Pinckney Street – Nice Beacon Hill Single Family, $813/sf – Well Bought
  • 1 Dalton St, unit 3901 (Four Seasons) – Another Flip at the “Prince of Darkness” – Well Sold 

New Development Review

The Archer – 45 Temple Street Beacon Hill
The Archer – Beacon Hill

There were a handful of price reductions at The Archer (45 Temple Street, Beacon Hill) last week which prompted us to have another look at the property.

Development Background

The Archer is a 62 unit redevelopment of two commercial buildings that were previously part of Suffolk University’s Law School campus. The site was also the home of the Boston English School back in the 1820s. Temple Street is on the North side of the Hill, directly behind the State House and runs down to Cambridge street, parallel to Bowdoin Street.

Batterymarch Insider

Batterymarch Group LLC is a full service independent real estate brokerage firm specializing in the downtown Boston market. More about our services here. “The Batterymarch Insider” is a brief snapshot of our current market thinking. As always, our “terms of use” apply. We encourage you to subscribe.

Special Spring Inventory Edition

Property Spotlight – On the Market

  • 220 Boylston Street, unit 1205/07/09 – $5,352/sf, Seriously? – $18.0 million ($5,352/sf)
  • 1 Huntington Ave. unit PH1802 – Great Unit, Mediocre Building – $7.995 million ($2,757/sf)
  • 1 Dalton Street, unit 4305 – Complete With the Finest Used Furniture – $7.5 million ($3,428/sf)
  • 776 Boylston Street, unit E9-D – That Well Lived in Feel – $5.5 million ($2,495/sf)
  • 96 Beacon Street, unit 2 – “The Walk Out Level” – $5.499 million ($1,942/sf)
  • 71 Mount Vernon Street, unit 3-5 – Beacon Hill Value Play! – $4.8 million ($1,234/sf)
  • 20 Charles River Square – Great Condominium Alternative – $4.1 million ($1,374/sf)
  • 82 Mount Vernon Street, unit 1 – Will the Third Time Be the Charm? – $3.249 million ($1,842/sf)

Well Bought/Well Sold

  • 28 Mount Vernon, unit 2 – A Lackluster Bidding War? Great Apartment  – Well Bought
  • 48 Commonwealth Ave, unit 2 – The Rising Tide Lifts All Values? We Think Not – Well Sold

Batterymarch Insider

Batterymarch Group LLC is a full service independent real estate brokerage firm specializing in the downtown Boston market. More about our services here. “The Batterymarch Insider” is a brief snapshot of our current market thinking. As always, our “terms of use” apply. We encourage you to subscribe.

Above vs. Below Grade Living Area – New MLS Transparency

There’s Nothing Luxurious About a Basement

Property Spotlight – On the Market

  • 142 Beacon Street, unit PH – A 29% Markup in Just Over a Year? No Thanks

Well Bought/Well Sold

  • 17 Louisburg Square – Hail the Liquidity Gods – Very Happy Brokers – Well Sold 
Above vs Below Grade Living Area – New MLS Transparency

The eastern Massachusetts Multiple Listing Service (MLSPIN) has updated their systems to break out living area square footage above and below grade. With “garden and parlor” level units so prevalent in the Back Bay and Beacon Hill, this added transparency is very good for buyers. We’ve long taken the stance that a discount should be applied to “lower level” living areas and this will make that exercise more straight forward 

We don’t hide the fact that we’re not fans of below grade finished living areas, i.e. kitchens, bedrooms, etc. Almost all below grade spaces have that distinctive musty basement smell; they’re prone to flooding, sewer backups, and rodent infestation.

Batterymarch Insider

Batterymarch Group LLC is a full service independent real estate brokerage firm specializing in the downtown Boston market. More about our services here. “The Batterymarch Insider” is a brief snapshot of our current market thinking. As always, our “terms of use” apply. We encourage you to subscribe.

The Real Reason Real Estate Prices Go Up

(Hint, It’s Not Supply/Demand)

Property Spotlight – On the Market

  • 28 Mount Vernon St., unit 2 – What’s Not to Love About this De Facto Single Family?

Well Bought/Well Sold

  • 146 Mount Vernon Street – Someone Interesting Lived Here – Well Bought
  • 776 Boylston St., unit E12B (Mandarin Oriental) – A Wallet Fight at the Mandarin? – Well Sold

The Real Reason Real Estate Prices Go Up

Having grown up on a trading desk (I’m a third generation stockbroker), markets and asset valuation are a bit of an obsession. Like all vigilant market observers, we’re always on the lookout for trends. Subtle trends can be a window into the future and can give you the edge.

We recently highlighted a trend in our market where people were selling properties after just six to 18 months (see “Real Estate Mulligans”). In the note, we pointed out that these sellers aren’t flippers looking to make a quick buck, they’re just looking to get their money back. We explored the trend a little deeper, going back five plus years and the story is more or less the same – many sellers clearly just want their money back.

So why then are prices going up? The answer is simple – fees.