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:

  • Seller Fatigue, Shadow Inventory, and Winter Deals
  • $10 Million Condo Club Gets a New Member
  • A Mulligan on Commonwealth Avenue
  • Millennium Tower, unit 5403 – Seller Takes a Painful Hit – Well Bought
  • 50 Liberty Drive, unit 6 – Third Owner in Less Than Three Years – Well Sold

What’s Catching Our Eye

As we shovel out from the first significant snow event of the season, real estate brokerage slips deeper into its winter hibernation.  In our experience, the winter doldrums, when listings are pulled off the market until the spring, is one of the best times to put a deal together.

Unsold properties that are taken off the market are almost always still available for sale. These sellers are often frustrated and have sellers’ fatigue. More importantly, typically the reason these properties didn’t sell in the summer or fall is that they were overpriced. So at this stage of the game some acceptance around the fact that their property isn’t worth as much as they anticipated has set in.

A good broker can coordinate with the seller’s representative to get well qualified buyers access to this hibernating inventory. The daunting task of starting the selling process all over again in the spring weighs heavily on sellers. Getting a smooth winter deal done and moving on with their lives is very appealing.

We will not be publishing an Insider next week as we’re putting the finishing touches on our 2021 Year Ahead report.

The $10,000,000+ Condo Club Gets a New Member

300 Pier 4 Blvd

Penthouse C, a 3,600+ square foot 4 bedroom, 4.5 bathroom unit at 300 Pier 4 Boulevard, the 106 unit condominium development on the site of the old Pier 4 restaurant, hit the market this week for $16,500,000 or $4,527.99/sf. Condominium fees and taxes will run you about $167,900 a year, but that does include the monthly fee associated with the four deeded parking spaces.

This unit originally sold in June of 2019 for $15,231,920 or $4,180/sf, with the buyer being the Tessie Nominee Trust (diehard Red Sox fans take note). The Trust financed the deal with a $7,000,000 mortgage and a $3,000,000 line of credit. Is this a new development flip or have the Trust beneficiaries become sick of looking across at the East Boston wharfs? It’s anyone’s guess.

Other members of the Ten Million Dollar+ Condo Club currently:

1 Franklin, unit GPH$45,000,000 ($3,394.69/sf)
776 Boylston, unit PH-2B$14,500,000 ($3,910.46/sf)
122 Commonwealth, unit PH$13,200,000 ($3,185.33/sf)
191 Commonwealth, unit 61$10,750,000 ($2,639.98/sf)
45 Temple Street, unit PH1$10,400,000 ($2,997.98/sf)

A Mulligan on Commonwealth Avenue

Several weeks ago, we published a report, “Days on Market – Caveat Emptor,” that highlights how brokers can manipulate the MLS system to reset days on market to zero (see report here). This week, 68 Commonwealth Ave unit PH (formerly known as unit 4) took a mulligan. A closer look at the previous listing (unit 4) shows that it had been under contract and for some reason the transaction didn’t close. Our sense is that the broker here not only wanted to reset the days on market but also wanted to shake the stigma of a deal that didn’t close.

Just to be clear, while it’s not common for transactions to fail, it does happen and it often has nothing to do with the underlying property. This unit, a 1,772 square foot, 2 bedroom, 2 bathroom, with direct elevator access, deeded parking, and roof deck with an outdoor shower (not something you see too often in the city) is offered at $3,000,000 or ($1,693/sf). The price looks a little rich to us but not outrageously so for this location.

Well Bought/Well Sold

1 Franklin (Millennium Tower) unit 5403 – Well Bought

1 Franklin Street

Unit 5403 at Millennium Tower, a 442 unit 60 story high rise located in Downtown Crossing, changed hands for $4,925,000 ($1,776/sf). The seller of this 2,773 square foot, 3 bedroom, 4.5 bath unit paid $5,400,000 for it in October of 2016. After spending time on the rental market, the unit was put up for sale in June of 2019 for $6,195,000 and had no takers. It returned to the market in September of this year a million dollars cheaper and found a buyer. To get the deal done, it appears that the seller took back a mortgage on the property in the amount of $3,325,000.

The buyer snapped up the unit at a 20% discount to the original asking price and got seller financing. Unfortunately, the seller took a $475,000 loss before fees and still has financial exposure to the property. There is good news if you were eyeing this one, the unit directly below (which is the same basic unit, but with a fancier kitchen) is currently available for $6,500,000.

Properties trade in the context of the current market, and we’d say that the buyer here did well. We do remain concerned that trends in these newer buildings aren’t favorable, and as new supply comes on the market that may intensify. With that said, we’re calling this one – Well Bought.

50 Liberty Drive unit 6H – Well Sold

Unit 6H at 50 Liberty Drive sold this week for $1,372,000 ($1,479/sf). There is nothing particularly noteworthy or interesting about this 1 bedroom, 1.5 bathroom 946 square foot unit except for the fact that it’s changed hands three times in less than three years.

It first sold in March of 2018 for $969,650. A few months later that buyer flipped it for $1,185,000 (August of 2018). The current seller held on for two years before putting it back on the market for $1,499,000 and got a deal after just 68 days on market.

Sitting at the tip of Fan Pier, 50 and 22 Liberty Drive are very convenient to downtown. In our view this is about the best location within the Seaport and that’s clearly reflected in the liquidity. We think the seller did well here and we’re calling this one – Well Sold.

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