The Batterymarch Insider

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“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:

  • 100 Shawmut – A Visit to the Other Side of the Tracks
  • New and Noteworthy – “Lights Out” at 36 Commonwealth
  • One Dalton – A Few Resales – Well Bought
  • 43 Commonwealth – Great Location and a Fair Deal – Well Bought  

What’s Catching Our Eye

100 Shawmut – A Visit to the Other Side of the Tracks

100 Shawmut Avenue

The first units of the new development at 100 Shawmut are now being delivered. According to MLS data, 22 of the 138 units have sold with an average price per square foot of $1,387. The units run the gamut from studios to 4 bedrooms and the building amenities are in line with the competition.

We’ve been intrigued with this development largely because we don’t understand the appeal of paying millions of dollars to abut a six lane interstate highway and an active railroad/rapid transit line. Setting the location aside, we’ve identified a few things that prospective buyers should have on their radars before plunking down their cash.

Rental Policy – The master deed places a 25% cap on the number of non-sponsor (developer) owned units that can be leased. These kinds of projects typically attract speculators who buy units and rent them out for a few years before flipping them. This investor activity gets you to the 25% threshold pretty quickly. In fact, of the sold units, 23% are currently available for rent.

There are benefits to limiting the number of rentals, but no one wants to find themselves in a position where they need to rent out their unit for a year or two only to be put on a waiting list.

Source: BPDA

Surrounding Development – According to the Boston Planning and Development Agency, 100 Shawmut is the first phase of an approved plan that ultimately will consist of two more buildings on this block with a total of 536 residential units. It remains to be seen if and when the other phases are built, but beyond this block, there is a huge amount of development in this area which we would expect will keep a lid on resale values.

It’s important for buyers to understand where future new buildings may be placed and how that could impact views down the road. There is no better way to quickly destroy property value than by taking away a view.

The units themselves are nice with decent finishes, but not really any different from all the other new construction product hitting the market. We remain puzzled with respect to these price points and the close proximity to the highway and trains. It’s hard to ignore the transportation infrastructure which, to our way of thinking, dominates the views of the front facing units. Additionally, we’d rather not hear the Orange Line or highway traffic whipping by our windows all night. We think that there are better options in the City, but that’s just our opinion. 

New and Noteworthy

36 Commonwealth Ave., unit 1 – Price Slashed… Again.

The price of this unit was chopped by 8% last week. It’s now offered at $6.9 million ($1,935/sf), $1.09 million below the original asking price. The seller, reportedly the former CEO of General Electric, paid $7.5 million for the unit back in 2016 when GE was moving to Boston. The good news is that there won’t be a capital gains tax to worry about.

If you’re thinking of taking a swing at this one, we’d recommend reading the new book “Lights Out: Pride, Delusion, and the Fall of General Electric” to get a better sense of the back story.

288 Commonwealth Ave, unit PH – Will the Third Broker Be the Charm?

The marketing saga here started back in mid 2018. According to MLS data, the unit has been under agreement twice, but for some reason it never sold. Subsequently the price was raised modestly, not surprisingly that didn’t help matters. Enter a new broker and a price cut, still no sale.

It’s now in the hands of yet a third broker and offered at the same price, $8.495 million ($2,265/sf). Here’s a thought – maybe the price is too high?

Well Bought/Well Sold

One Dalton – Resales – Well Bought

Two units at One Dalton (the “new” Four Seasons) changed hands last week. 

Unit 3205, a 32nd floor 2,182 square foot 3 bedroom sold for $5.25 million ($2,406/sf) after 322 days on the market. The seller bought the unit in mid 2019 for $5.0 million.

One Dalton Street

Unit 2806, a 28th floor 897 square foot 1 bedroom sold for $1.815 million ($2,023/sf) after 202 days on the market. The seller bought the unit for $1.575 million.

There have only been a handful of resales at One Dalton so far. The two transactions reported last week are in line with what we would expect. After fees, the larger unit is basically flat with what the owner paid and the smaller unit traded at a 9% premium.

We’re still on the fence about this location. It’s off the beaten path which isn’t necessarily a bad thing, however it’s not exactly what we would describe as a convenient location. But this is the Four Seasons and we expect that the combination of the brand, the views, and the fact that this is the only “pencil tower” in Boston will support the values. We’re calling these – Well Bought.

43 Commonwealth Ave St, unit 5 – Great Location, Market Correct Price – Well Bought

Source: Boston Athenaeum

Unit 5 at 43 Commonwealth, a penthouse level 2,122 square foot 2 bedroom has a new owner with a purchase price of $2.525 million ($1,190/sf). Located on the sunny side of Commonwealth Ave, we view this as an ideal Back Bay location. The condominium fee of $935 seems on the low side for an elevator building, maybe too low (low condominium fees should trigger a closer look at the building’s financials).

Built in 1902, this Federal style townhouse replaced the original Victorian style house that was built back in 1867, so by Back Bay standards this is newer construction. History buffs take note that the property once belonged to the senior Henry Cabot Lodge.

On the negative side of the ledger, the building takes up almost the entire lot, so there isn’t any parking in the rear. The unit is clearly in need of updating, but based on the valuation, we think that there is room to do some smart renovation work without getting upside down. We’d also explore the feasibility of installing a roof deck. This was a market correct price. We’re calling it – Well Bought.

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