The Batterymarch Insider
Property Spotlight – Special Edition
The $10 Million+ Condominium Club
Batterymarch Group is focused on buyer representation, so the highlighted listings are not ours. These are our opinions, so take them with a grain of salt. We’re happy to set up showings of these properties, offer our valuation analysis, and assist with preliminary renovation budgets when needed.
What does $10 million and up buy you in the downtown Boston condominium market? The short answer – it’s slim pickings. Don’t get us wrong, these units are (or have the potential to be) great properties – but that’s a baseline expectation at these price points. By our way of thinking, they’re missing the wow factor to justify these lofty valuations.
Of the 11 condominium units listed in MLS at or above $10 million, many are seeking record high prices. We don’t see them as record nice properties. More importantly, we see meaningfully more attractive properties at substantially lower prices. Here’s our take.
34.5 Beacon St., unit PHN – As-Is, Bring Your Contractor – Offered at $20 million ($2,479/sf)
DOM – 186, Taxes – $130,475/yr, Monthly Condominium Fee – $14,960
When we think about condominiums with a $20 million asking price, the last thing that comes to mind is “bring your contractor,” but that’s the case over at 34.5 Beacon Street, unit PHN. This 8,068 square foot three unit combination is being offered as a gutted shell.
On the positive side, if you’re in the market for an 8,000+ square foot condominium on Beacon Hill, you have the advantage of finishing the unit to your own liking. While it’s nice that the demolition work has been done for you, the next owner can expect to spend in the neighborhood of $400-500/sf finishing the unit; of course the sky is the limit when it comes to that kind of work.
If you’re thinking about dropping upwards of $25 million on a finished downtown condominium, we can give you a list of reasons as to why you might want to think twice about this unit. Not the least of which is that real estate taxes and condominium fees will run you just shy of $26,000 a month.
34.5 Beacon St., unit PHN is offered by MGS Group.
220 Boylston St., unit 1209 – $5,352/sf , ‘Nuff Said – Offered at $18 Million
DOM – 157, Taxes – $79,6345/yr, Monthly Condominium Fee – $8,997
We highlighted unit 1209, a 3,363 square foot three bedroom unit in our 2022 Spring Inventory edition (see “$5,352/sf, Seriously?”). It’s been well advertised that the seller is automotive retail giant Herb Chambers. This is a great unit, in many respects we prefer the original Four Seasons over the new Dalton Street tower. We have no doubt that no expenses were spared when Herb renovated the unit, but $5,352/sf? Yikes.
Just for some valuation context, according to MLS records there have only been three condominium transactions in Boston that have breached $4,000/sf, and of those the high water mark stands at $4,180/sf (penthouse unit at Pier 4 in the Seaport). Herb’s asking price is a 28% premium over the previous record. Sorry Herb, but we see fair value in the $3,000/sf neighborhood.
220 Boylston St., unit 1209 is offered by Gibson Sotheby’s.
63 Mount Vernon St., unit PH – Hard “No” For Us! – Offered at $15.995 Million ($3,155/sf)
DOM – 13, Taxes – $TBD/yr, Monthly Condominium Fee – $5,902
The penthouse at 63 Mount Vernon Street, a 5,070 square foot 3 bedroom triplex, has been kicking around the market since late 2021. This unit has one of the nicest roof decks on Beacon Hill, gets good sunlight through the south facing front windows, and comes with 2 garage parking spaces. That about sums up the positives.
We previously outlined our concerns about the unit (see “Gulp, They Want How Much?”) so we won’t rehash it all here. For us, there’s a huge disconnect between the asking valuation and what you get for your money. Nearly $16 million for a 5,000+ square foot 3 bedroom apartment with only 2 full bath rooms? In our book, this wasn’t a well thought out “full” renovation. We shudder to think about what developer shortcuts may be lurking under the skin.
The developer recently brought in a new broker but stuck with the same unrealistic price. Hint to developer: the problem isn’t the broker – it’s your price! If you can live with what we see as subpar finishes, we see fair value around the $2,000/sf mark (on a good day).
63 Mount Vernon St., unit PH is offered by Campion & Company.
1 Dalton St., unit 4602 – Needs Everything! – Offered at $14.8 Million ($3,394/sf)
DOM – 123, Taxes – $120,299/yr, Monthly Condominium Fee – $10,705
Just like 34.5 Beacon Street, unit 4602 is being offered as a shell. Apparently there are architectural plans available, or the next owner can build the space out exactly the way they want. Like others on the list, this is a two unit combination hence the large square footage (4,361 sf).
As we see it, $3,394/sf would be ambitious even it the space was finished. While people paid well north of $3,000/sf buying from the developer, MLS records indicate that the average selling price per square foot in the resale market stands at $2,398/sf. The highest price paid per square foot in the resale market is $2,856 according to MLS. Keep in mind that all of those resales were finished units and include things like floors, bathrooms and kitchens.
There are currently nine other fully finished units for sale at 1 Dalton with an average asking price of just over $3,000/sf; we have a hunch that there’s more inventory behind that. At the right price, this is a decent opportunity for someone with a need for a larger unit.
We’d caution that at the current asking price it’s hard to imagine that a buyer will get away for under $4,000/sf all-in. At that valuation, getting your money back down the road could be problematic, particularly for a non-penthouse unit.
1 Dalton St., unit 4602 is offered by MGS Group.
50 Liberty Drive, unit PH1B – Fantasyland Price? – Offered at $14.8 Million ($4,090/sf)
DOM – 5, Taxes – $73,743/yr, Monthly Condominium Fee – $6,376
This 14th floor 3,619 square foot 4 bedroom unit has some of the best views of the Harbor, the East Boston wharfs, and Logan Airport. The unit features 2 private outdoor balconies and garage parking for 2 cars.
If we were going to live in the Seaport, Liberty Drive would be at the top of our short list, largely based on the convenient location. Setting aside the view, the unit itself isn’t much different from all the other units in these ubiquitous glass boxes – it’s nothing special.
You’d have to really love the view to shell out $4,090/sf when you consider that, according to MLS records, the average selling price in the building is just over $2,000/sf for the last 24 months, and the highest price paid in the building is $2,775/sf.
In fairness, there were two penthouse sales at 300 Pier 4 a few years ago that breached the $4,000/sf mark. The big difference is that the Pier 4 penthouse units have outstanding and truly spacious and private roof top outdoor spaces (wow factor).
50 Liberty Drive, unit PH1B is offered by Campion & Company.
1 Franklin St., unit PH3A – Downtown Crossing Price Increase? – Offered at $13.999 Million ($3,355/sf)
DOM – 73, Taxes – $92,011/yr, Monthly Condominium Fee – $6,270
Unit PH3A, a 4,172 square foot 4 bedroom sits 58 floors above Downtown Crossing. These upper floor units at 1 Franklin are all about high ceilings and amazing views.
The seller of this unit has been trying to offload it for a few years and apparently they have the idea that Downtown Crossing prices are skyrocketing. Last year’s asking price was $12.0 million, it’s now offered at $13.999 million.
We should point out that according to MLS records, the highest price paid per square foot at 1 Franklin is $2,874. That was back in 2016 when 1 Franklin was the “it” property. Breaking through the $3,000/sf mark in this cycle may prove to be an unrealistic pipe dream.
There are way too many brand new units hitting the downtown market to warrant sky high re-sale valuations. Plus, setting aside the amazing views, does anyone really want to live in Downtown Crossing these days?
1 Franklin St., unit PH3A is offered by Redfin.
1 Dalton St., unit 3801 – Pricy, But You Get the Marble Floors! – Offered at $12.0 Million ($3,728/sf)
DOM – 48, Taxes – $107,126/yr, Monthly Condominium Fee – $6,559
If you can get by with just 3,219 square feet, you may be better off with this unit versus unit 4602 that we profiled above. You’d be eight floors lower, but this is a finished unit with custom features, most notably marble floors in the public rooms.
The seller here bought this unit in January of 2020 for $10.65 million ($3,308/sf). It’s not clear if the current seller did the custom finishes. At the end of the day it’s irrelevant who installed the marble floors, the 2020 price seems a bit closer to fair market.
1 Dalton St., unit 3801 is offered by Campion & Company.
2 Avery St., unit PH2A – Nicely Renovated, Value Play? – Offered at $11.75 Million ($2,498/sf)
DOM – 53, Taxes – $82,889/yr, Monthly Condominium Fee – $7,794
Unit PH2A at 2 Avery Street, a 4,703 square foot 4 bedroom apartment is located 39 floors above the Boston Common. The views looking over Beacon Hill, Back Bay and Cambridge are outstanding. To us the hook with this unit relates to the extensive recent renovation.
The Avery Street towers, which are operated under the Ritz Carlton brand, are 22 years old and are somewhat antiquated, which isn’t necessarily a bad thing. Unlike the new “it” buildings, units in older buildings tend to be more spacious.
Newer buildings may be loaded with the latest amenities, but developers have cut back the square footage of the condominium units. Just look at the second bedrooms at some high profile new developments – you can barely fit a bed in these rooms.
The antiquated nature of these buildings, together with the fact that many of the units are in need of updating, has kept a lid on valuations. The average selling price at 2 Avery over the last 24 months is about $1,200/sf according to MLS records.
Is unit PH2A worth the premium? We think yes. A serious buyer should be able to negotiate an attractive deal here.
2 Avery St., unit PH2A is offered by MP Boston.
142 Beacon St., unit PH – Back Bay Flip or Flop? – Offered at $10.9 Million ($2,789/sf)
DOM – 159, Taxes – $99,508/yr, Monthly Condominium Fee – $2,183
The penthouse at 142 Beacon St., is a 3,908 square foot 4 bedroom triplex. The seller bought the property in early 2021 for $9.2 million ($2,354/sf) and a year and a half later put it up for sale for $11.3 million before cutting the price to $10.9 million ($2,789/sf).
We previously highlighted the apartment (see “No Triplex Discount – Well Sold”). This is a great location and it’s still a newish unit, but not new. We’re generally not big fans of triplexes, and at this price point we think that 23 foot wide buildings are on the narrow side.
This unit sat on the market forever before the current owner bought it. We thought that they paid too much for it at the time and highlighted liquidity problems down the road. The seller must think that they got a pandemic-deal in 2021 to justify the markup. The market thinks otherwise.
142 Beacon St., unit PH is offered by Gibson Sotheby’s.
2 Avery Street, unit 29E – Jumbo Unit, Reasonable Valuation – Offered at $10.4 Million ($1,872/sf)
DOM – 338, Taxes – $83,350/yr, Monthly Condominium Fee – $8,819
If you’re looking for a 5 bedroom, 5,555 square foot apartment, and if you’re ok with a unit that’s a bit dated in an equally dated building – look no further. Unit 29E is the clear value play in the $10 million+ condo club.
Living on Avery Street isn’t for everyone, but the location is very convenient to downtown and Back Bay. Unit 29E faces the Boston Common and it has very good westerly views.
This unit, which is actually two units combined, has been on the market for nearly 600 days. We’d advise getting a detailed renovation estimate and negotiate a deal with an eye on keeping your all in cost well below $2,000/sf.
2 Avery St., unit 29E is offered by Campion & Company.
400 Stuart Street, unit PH2 – Nice Penthouse, But the Wind? – Offered at $10.25 Million ($2,891/sf)
DOM – 5, Taxes – $78,998/yr, Monthly Condominium Fee – $4,774
There are three penthouse units at 400 Stuart Street (The Clarendon) and it looks like they will all turn over in about a 1 year period. For the most part the penthouse units are identical – 3,545 square feet with 4 bedrooms and they each occupy their entire floor.
In general we’re not big fans of The Clarendon. The corner of Clarendon and Stuart Streets is considered to be the windiest in the city and the new Raffles development has blocked what were previously nice westerly views. We’re also concerned about approved new development projects in that immediate neighborhood. That said, we do see the appeal of the penthouse units.
The only significant difference between the penthouses is that unit PH1 (31st floor) has a 1,000 square foot private terrace. PH1 is currently under agreement after just two days on the market, so we’d expect that it will sell at the asking price of $9.5 million ($2,679/sf).
Penthouse unit PH3 (33rd floor) traded a year ago for $9.1 million ($2,576/sf). This unit lingered on the market for 105 days and sold at a 11% discount to the $10.25 million asking price.
The unit currently offered, unit PH2 (32nd floor), has been tastefully updated. We’d expect that it will trade at a discount to the other two penthouses as it doesn’t have private outdoor space, and when unit PH3 traded a year ago the Fed Funds rate was pegged at zero. What a difference a year makes.
400 Stuart St., unit PH2 is offered by Campion & Company.
About Batterymarch Group LLC – Batterymarch Group is an independent full service real estate brokerage and advisory firm focused on the downtown Boston high-end residential market. We represent both sellers and buyers with a sharp focus on valuation. We also offer sub-advisory and owner’s representation services to financial institutions, family offices, and trustees.
About Andrew Haigney – A 25 year Wall Street veteran, Andrew held senior positions at leading global investment banking institutions where he routinely valued and negotiated complex securities transactions on behalf of institutional clients. Andrew has been an outspoken advocate of a universal fiduciary standard. In founding Batterymarch Group, Andrew brings that same discipline and passion to real estate brokerage.