Batterymarch Group LLC is a full service independent real estate brokerage firm specializing in the downtown Boston market. More about our services here.
In this issue:
- Architecture and Design Don’t Lie, They Always Reveal Their Age
- New and Noteworthy – Mayoral Candidates See Higher Residential Taxes
- 28 Chestnut Street – …and the Cabots Only Talk to God – Well Bought
- 7 Mount Vernon Place – Developer Makes Out Like a Bandit – Well Sold
What’s Catching Our Eye
The Single Biggest Mistake Buyers Make – Paying Full Price for Outdated Properties
They say that architecture and design don’t lie – they always reveal their age. Take a walk around the Back Bay and it’s easy to distinguish the original buildings, which were built in the 1800s, from the buildings that were built in the early/mid 20th century.
The story is the same with interior design. A good real estate professional can walk into a property and instantly tell you when it was last renovated. This is a key reason why listing sales agents love to stage properties. By bringing in contemporary furniture, buyers get distracted from what they’re actually buying – the real estate.
As we see it, the single biggest mistake buyers make is paying full market price for outdated properties, it happens all the time. The fact is that “outdated” usually goes well beyond aesthetics. If the kitchen hasn’t been updated in 25 years, it’s a safe bet that the mechanical systems are even older, and they probably have exceeded their useful lives.
Renovating space in an urban market is expensive, and logistically complicated. It’s not for everyone. That said, we see very good value in this part of the market. Buyers willing to take on a renovation project can come out way ahead of the game and get a result that suits their needs and lifestyles. The caveat is that buyers need to have a clear understanding of what they are actually buying – valuation matters.
Feel free to reach out to us to learn more about where we currently see value opportunities in the market.
New and Noteworthy
Property Taxes – Mayoral Candidates See Higher Residential Taxes
Mayoral candidate and Boston’s former Economic Development Chief John Barros has concerns about shortfalls in the City’s commercial tax collections. He was recently quoted, “It’s going to put the burden over to the residential tax base and you’ll see a residential tax increase.” Barros continued, “This is a big, big problem for our City and something we should take very seriously.”
It’s going to be some time before we have a clear handle on the true fallout of the pandemic. In the meantime, we’re keeping a close eye on the health of the commercial market. What’s good for the goose is good for the gander.
200-202 Beacon Street, unit 3 – Piecemeal Liquidation
Unit 3 at 200-202 Beacon Street has been on and off the market since 2016. After five years it looks like they finally have an accepted offer. Originally offered at $9.995 million ($1,848/sf), they recently knocked a million dollars off the price – after they sold off part of the unit.
In light of the piecemeal liquidation, it’s not entirely clear what the buyers are actually getting. The moral of this story is that the market for 5,500/sf condominiums in Boston is pretty thin.
Well Bought/Well Sold
28 Chestnut Street – …and the Cabots Talk Only to God – Well Bought
If walls could speak! 28 Chestnut sold last week, the former home of a prominent member of the Cabot family, who, as legend has it, had regular contact with the almighty. The house was on the market for 140 days and the final sale price was $8.5 million, a 20% discount to the original asking price of $10.75 million.
Built in 1823, this is one of the first row houses on Beacon Hill and sits on land that was part of the original Mount Vernon Proprietors real estate syndicate, the first subdivision in America. In recognition of its early Federal style architectural importance, the house is subject to a 2005 façade preservation easement with the National Architectural Trust.
At 6,504 square feet, this five story house is pretty much on par with other large Beacon Hill homes. We were told that the house, which last traded back in 2003 for $5.7 million, was completely updated with the exception of the kitchen. By our way of thinking, the house felt dated, so beyond an overdue kitchen renovation, we expect that the new owner will undertake more extensive renovations to crisp it up.
Net, net, this is a great house in an amazing location (good enough for a Cabot), and it has the added advantage of off street parking. From a valuation perspective, this looks close to fair value for a non-elevator, somewhat dated house, with some leftover budget for needed improvements. We wouldn’t call this a bargain, but it looks like a fair deal to both parties, we’re calling it – Well Bought.
7 Mount Vernon Place – $15.15 Million, Above the Subway? – Well Sold
7 Mount Vernon Place traded this week. The final sale price was $15.15 million or $2,005 per square foot, setting a new price per square foot high water mark for a single family home in the City of Boston. When the house, with an original asking price of $16 million, got an accepted offer in just 16 days, we half jokingly commented that Mount Vernon Place may be the new Louisburg Square. As it turns out, that may be the case.
This 7,500 square foot, 5 bedroom house (which is technically a condominium unit) is part of a redevelopment project that includes the neighboring house (6 Mount Vernon Place) as well as the eight unit building at 25 Beacon Street. The house comes with two deeded parking spaces, one at the front door and the other in the 13 car parking garage that was excavated below 7 and 6 Mount Vernon Place.
We’re not completely surprised about the quick sale as the house is pretty nice. We are, however, surprised about the price. The original developer marketed the property as a gutted shell, with a new roof, new windows, new foundation, and a fully restored exterior. It sat on the market for nearly five years before a second developer bought it for $6.8 million ($900/sf) last year. At this sale price, the developer had $1,105/sf to work with, we highly doubt that the spec interior buildout came anywhere close to that much.
We looked at this house several years ago for a client. The main reason we took a pass on it was the concern about the MBTA Red Line running under the house. The rumbling of the Red Line may not bother everyone, but it was annoying enough to kill a deal for our client.
From a valuation standpoint, these trophy property transactions don’t always make sense. As much as we actually like the house, the reality is that this isn’t Louisburg Square, and one of the advantages of single family homes is that you don’t deal with condominium associations. This being a condominium unit, you don’t get that benefit. As we see it, the developer made out like a bandit on this one, we’re calling it – Well Sold.
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 the real estate brokerage.