The 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.

In this issue:

  • Back Bay vs Seaport – Less is More in the Seaport
  • New and Noteworthy – Other People’s Money on Beacon Hill
  • 37 Branch Street – Oddball House/Street, Fair Value – Well Bought
  • 15 Marlborough, unit 4 – All the Money for an Older Renovation – Well Sold  

What’s Catching Our Eye

Back Bay vs Seaport – Less is More in the Seaport

We see the appeal of living in the Seaport. It’s new and vibrant, with good energy, especially during the summer months. But the Seaport isn’t without its critics. The normal knocks include the cold winter winds whipping off the water, rising sea levels, the monotony of the boxy glass architecture, and the lack of an established neighborhood. We continue to struggle with the Seaport value proposition.

Seaport – 22 Liberty Drive

Unlike the suburbs, where developers try to shoehorn the largest possible homes onto the smallest lots (the McMansion), urban developers squeeze as many units into the building as they can. The end result is that most new developments have scaled down units. Since we typically think of high-end or “luxury” real estate in terms of light and space, this presents a problem.

We put pen to paper, comparing the Seaport (basically all new construction) with the Back Bay (well established infrastructure). For this exercise, we looked at sold units for the trailing 12 months and used a valuation floor of $1.5 million. Here’s what the numbers say:

  • Back Bay – 128 transactions, average unit size – 2,029 square feet, average selling price per square foot – $1,525.
  • Seaport – 93 transactions, average unit size – 1,481 square feet, average selling price per square foot – $1,832.

The bottom line is that if you’re looking to buy in the Seaport, you can expect to pay a 20% premium, and you’ll get about 27% less space vs the Back Bay. It’s clear to us that the Back Bay represents better value. We’re the first to recognize that this is far from a perfect analysis, but if you’re looking for a feeling of spaciousness, you’ll likely get more bang for your buck elsewhere.

New and Noteworthy

Four Beacon Hill Buildings Sell – With Other People’s Money!
105-109 Charles Street

A Boston-based real estate developer snapped up a portfolio of four Beacon Hill buildings last week. The deal included 105, 107, and 109 Charles Street, as well as 2 Joy Street. The grand total for the buildings came in at $13.66 million. We couldn’t help but notice that the buyer took a bank mortgage of $8.5 million and the seller took back a second $4.5 million mortgage. By our calculation, the buyer only put up $660,000.

No doubt the new owner will invest a boat load of capital updating these properties, but we love an old school “other people’s money” deal. With that kind of debt load, we’d expect to see condominium conversions with units flipped back into the market in the next 18 months. We’ll keep you posted.

300 Pier 4, unit 7C – Asking Price Roundtrip
300 Pier 4

We previously noted that when unit 7C at 300 Pier 4 was re-listed this spring after a short hiatus from the market, the seller raised the price from $6.9885 million to $7.425. At the time, we commented that raising prices is rarely an effective marketing technique. Apparently someone recognized the errors of their ways and lowered the price back to the original asking price.

It’s worth pointing out that the unit next door (7D) just sold for $5.179 million ($2,429/sf). Unit 7C and 7D are nearly identical, the main difference being that 7C is about 100 square feet bigger, has an additional bathroom, and captures more of a city view. Unit 7C is currently asking $3,099/sf, but if we apply the 7D valuation you get a price of $5.477 million. That seems closer to fair value to us.

Well Bought/Well Sold

37 Branch Street – Sells $1.3 Million Below Original Ask – Well Bought
37 Branch St (rear)

37 Branch Street has a new owner after 273 days on the market, selling for $4.2 million – a 24% discount from the original asking price. This fully renovated 4 bedroom quasi single family has some nice features including home automation, but nothing over the top. It’s a par for the course renovation flip. 

37 Branch St. (front)

While it was marketed as a single family home, it’s actually a condominium unit of 52 Beacon Street (this was an outbuilding to the rear of 52 Beacon). As we pointed out last fall when it was listed, we think that the Branch Street facing windows are undersized and the rear windows (facing the rear of 52 Beacon Street) create a gold fish bowl effect.

The location is very good, but Branch Street is not exactly the most desirable street on Beacon Hill, but that’s just our opinion. The Master Deed indicates that the unit is 3,800 square feet, so the buyer is getting new construction on Beacon Hill for $1,105/sf. That’s pretty compelling, we’re reluctantly calling this one – Well Bought.

15 Marlborough St, unit 4 – All the Money for an Older Renovation – Well Sold
15 Marlborough Street

Unit 4 at 15 Marlborough Street, a 2,120 square foot, 3 bedroom changed hands last week for its full asking price of $4.2 million ($1,981/sf) after just 28 days on the market. Some maintain that the first block of Marlborough is the most desirable block in the Back Bay, and we tend to agree with them. This was a 2003 condominium conversion at which time 13 and 15 Marlborough Street were combined to create 37 feet of frontage and large single floor units.

This unit has most of the attributes we look for: great location, elevator, large foot print, on the sunny side of the street, and two car garage parking (if memory serves correctly, there are lifts in the garage which some people may find inconvenient). This is an older renovation and in our book pushing $2,000/sf is way too much of a premium. It’s a nice unit, but the seller definitely got the better end of this deal, it was – Well Sold.

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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.

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