The Batterymarch Insider

“The Batterymarch Insider” is a brief snapshot of our current market thinking and some highlights of what we see going on in the downtown Boston market. As always, our “terms of use” apply. We encourage you to subscribe.

In this issue:

  • 110 Arlington Street – Fire Sale, Unsafe at Any Price?
  • New and Noteworthy
  • 41-43 Phillips Street, unit 19 – Mispriced or looking for a sucker? – Well Bought
  • 361 Beacon, unit 3 – “Days Years on Market” – Well Sold  

What’s Catching Our Eye

110 Arlington Street – Fire Sale – Unsafe at Any Price?

We’ve previously highlighted 110 Arlington Street. It was originally slated as a boutique hotel, but when the City didn’t approve the project a new developer stepped in and built out five condominium units. Marketing kicked off in the spring of 2019 with no sales, and an attempt to rent the units was equally unsuccessful.

110 Arlington Street

A new broker was brought in, prices were lowered – crickets. This week we got additional price cuts and units are now offered at 21–32% below the original asking prices. Our hunch is that the developer and bankers have had enough and accepted the fact that location really does matter.

At the risk of coming across like a skunk at a lawn party, our concern relates to safety issues in the lower level units. Having spent time as a volunteer firefighter in a small rural town in Vermont, we have a heightened awareness of fire safety, particularly with respect to basements.

Basements are considered the most dangerous places to be in a structure fire. We’re not building code experts, but our understanding is that below grade sleeping quarters need either two means of egress, or one egress and one emergency escape and rescue opening.

These basement bedrooms are accessed by only one set of stairs; there are no windows or any other means of escape. Oddly, the bedrooms get natural light via glass floors on the street level, something know as “borrowed light” (see photos here).

We assume that the developer found some loophole to get approval for these units. The prices are becoming compelling, but we think that buyers should be aware of these conditions.

New and Noteworthy 

20 Louisburg Square

20 Louisburg Square – After 99 days on the market, this 7,610 square foot single family reports an accepted offer, the asking price is $16,000,000. 17 Louisburg sold last January for $13,500,000 (it was Well Bought). By our way of thinking, 17 LBS is a better property. We’ll report back with the closing price.

400 Stuart Street (The Clarendon) – Who says that you can’t bring a dead dog back to life? This week three units at The Clarendon reported accepted offers. Don’t panic if you’re looking to make this your next home as there are still six units available for sale and another six that are for rent (we have a hunch that there is stock behind).

273 Beacon Street, unit PH – A 2,500 square foot 4 bedroom with parking reports an accepted offer after just 4 days. Asking price is $4,250,000 ($1,700/SF). This will be the fourth time this unit has turned over since it was renovated back in 2009. Maybe the frothy real estate market will come to Back Bay/Beacon Hill after all?

447 Beacon Street, unit 2 – A second large price cut brings the asking price down to $5.49 million ($1,691/sf), 16% below the original price. This 3,247 square foot triplex was created by combining two units. The listing indicates that the square footage is the sum of the two combined units, which by our calculation, would be 3,030 square feet. According to our math, the asking price is $1,812/sf. Either way, it seems like a big price for a non-penthouse, non-river front triplex in the last block of Beacon.

Well Bought/Well Sold

41-43 Philips Street, unit 19 – 30% Discount to Original Price – Well Bought 

Unit 19 at 41-43 Philips Street, a 2,158 square foot 3 bedroom duplex changed hands last week after 156 days on the market for $2.75 million ($1,274/sf), a $1.145 million discount from the original asking price. The unit features a good sized private roof deck and three onsite garage parking spaces.

41-43 Philips Street

The building is an 1860s schoolhouse that was converted into 18 condominium units back in 2000. The listing notes that there is a $727/month special assessment that will run for 92 months which isn’t surprising as you should expect to start replacing systems after 20 years. 

Our question is did the broker originally misprice the unit in excess of $1 million, or was this one of those deals where they put a big number on it to see if some sucker came along? We suspect the later.

This was marketed as a premier concierge building. While we don’t typically think of Philips Street when we think of premier properties, we see good value here especially when you consider that Related Beal is offering garage parking spaces for $350,000 each at the Charles Street Garage just a few blocks away. We’re calling this one – Well Bought.

361 Beacon Street, unit 3 – “Days Years on Market” – Well Sold

361 Beacon Street

After over two years of marketing, unit 3 at 361 Beacon Street traded this week for $7.8 million ($1,970/sf). This 3,960 square foot, 4 bedroom penthouse triplex has four decks, two onsite garage parking spaces, and direct elevator access to all floors.

In late 2017, the building was completely gutted and transformed into three high-end units, everything is new. We’re not the biggest fans of triplexes, however this is an extra wide building so you do get a good sense of spaciousness.

Parking Ramp

The underground parking garage was excavated below the building and is accessed by a fairly steep ramp. We had a client who seriously considered this unit until we tested out the ramp only to discover that their car didn’t have the ground clearance to go down the ramp.

We think that at this price point on Beacon Street you should be on the river side. We also have reservations about the parking setup. It’s a nice spec built unit and we think that the buyer did ok, but we see liquidity issues down the road. This one was – Well Sold.

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2 thoughts on “The Batterymarch Insider

  1. Marc

    Thanks for your insightful commentaries. Would you please comment on 8 Mt Vernon Place? This property looks new, has been on the market for quite a long time, and seems to represent a ceiling for single family real estate value in urban Boston.

    Can you also provide a sense of the services you provide for potential seller clients? Are you a broker yourself or do you partner with a broker?

    Reply
    1. Andrew Haigney Post author

      What are now three large single family homes on Mount Vernon Place at one time belonged to the Unitarian Church. They maintained their offices at 25 Beacon Street, a property they also owned. The Church sold these properties to a developer a number of years ago. 25 Beacon Street was converted into luxury condominium units and the Mount Vernon Place properties were converted back to single families.

      The developer built a meaningful parking garage (which is accessed via an automobile elevator on Joy Place) under the Mount Vernon Place homes to serve both 25 Beacon and the Mount Vernon homes. We had a client looking at one of the single families who was quoted over $1.0 million for an additional parking space.

      8 Mount Vernon Place has changed hands in recent years and each subsequent owner has continued to improve it with top notch finishes. With 9,016 square feet of living space, the $22.5 million equates to $2,495/sf which includes four parking spaces.

      Your observation relative to it being a valuation ceiling probably has some merit. The fact that it’s been on the market for 584 days pretty much sums up the valuation question, but keep in mind there isn’t much liquidity at that price point in Boston. One thing to be aware of is that the Red Line runs underground in that area.

      Batterymarch Group is an independent licensed real estate broker. Our primary focus is representing buyers. We do offer advisory services for sellers, but as a general rule we don’t take listings. Additionally, we offer owner’s representation services. Feel free to reach out to us, we love to chat about real estate.

      Reply

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