In this issue:
- Mount Vernon Place – The New Louisburg Square?
- New and Noteworthy – Big Ticket Comm. Ave. Sales
- 216 Beacon Street – A Square Foot Shell Game – Well Sold
- 341 Beacon Street – Nice Unit, Mediocre Building – Well Sold
What’s Catching Our Eye
Mount Vernon Place – The New Louisburg Square?
7 Mount Vernon Place, a 7,553 square foot single family, hit the market this week for $16 million ($2,118/sf). Mount Vernon Place is a short dead end that runs off of Joy Street toward the State House. This 35 foot wide, 5 bedroom home comes with two parking spaces (one at your front door, and the other in a parking garage below the house).
The Gentrification of Upper Joy Street – The stretch of Joy Street that runs between Mount Vernon and Beacon Streets has seen a transformation with a handful of properties being converted from commercial use to high-end residential. Starting at the corner of Mt. Vernon and Joy, the six story office building that was once home to the Little Brown publishing company was converted into seven condominium units in 2018. Moving toward the Common, 3, 4, and 5 Joy Street, which previously served as headquarters for the Appalachian Mountain Club, have been chopped up into condominiums. And across the street, the three buildings along Mount Vernon Place, together with 25 Beacon Street, were previously owned by the Unitarian Church and have been converted to residential use.
7 Mount Vernon Place was offered as a “shell” and sat on the market for years before being bought by a developer in January of 2020 for $6.8 million (the pricing started at $8.0). It’s noteworthy that the shell included a new roof, new windows, a fully repointed exterior, and a gutted interior. In essence, this was offered as a clean canvas that just needed an interior build out.
Backing out the building cost from the asking price gives you $9.2 million, or $1,218/sf to play with. It’s hard for us to imagine that the renovation costs are anything close to that, particularly when you consider it came with new windows, etc. We smell a juicy profit, or as they say, room for negotiation.
One reason that we haven’t paid much attention to the area relates to the neighboring house, 8 Mount Vernon Place which is on the market for $22.5 million, $2,303/sf (recently reduced from $25 million), a price that we have a hard time taking seriously. Based on the fact that it’s been for sale for nearly two years, we’d say that the market agrees with us. At $2,118/sf, will 7 Mount Vernon suffer the same fate?
While we’re warming up to Mount Vernon Place, the asking prices make Louisburg Square look like the low rent district. But at the right price, we think 7 Mount Vernon could be a great house. Our caveats include: first, the Red Line runs under this area and we’d want to understand if it would impact this property, and second, you’re actually buying a condominium unit in an association that includes 6 Mount Vernon Place and 25 Beacon Street. A fair amount of due diligence is required here.
New and Noteworthy
122 Commonwealth Ave – Sold Out – The last two units of this three unit redevelopment closed this week. Notably, the penthouse fetched $12.5 million ($3,016/sf), a slight discount to the $13.2 million asking price. The success of this project can be chalked up to a great location, the extra wide building, and well executed, high-end finishes. Build it and they will come.
35 Commonwealth Ave, unit PH – It took only 3 days to get an accepted offer on this penthouse unit which closed last week for $14.5 million. This unit first traded a year and a half ago for $14.0 million, so after fees this is basically a wash.
We’re always a bit puzzled at these ultra high end new development units that are re-offered for sale so quickly after the initial sale. There always seems to be a lot of leverage used in the initial purchase. Oh yeah, if you didn’t figure this one out on your own, it was Well Sold!
Well Bought/Well Sold
216 Beacon Street – A Square Foot Shell Game – Well Sold
After 202 days on the market, unit 3, a 3 bedroom penthouse duplex with a private roof deck and one car parking at 216 Beacon Street sold for $2.9 million, an 11% discount to the original asking price.
On the surface this looks pretty reasonable, but when you factor in the fact that there isn’t an elevator, paying close to $3.0 million for a fourth floor walk up is a non-starter for us. Empty nesters are a big part of the target market for these kinds of units. The cold reality of aging includes things like new hips and knees. It’s fair to say that aging in place here would be unrealistic.
Our other problem has to do with the square footage. The unit was marketed as 2,020 square feet, but the listing notes that the City records indicate that the square footage is 1,672 and that “buyer to perform diligence.” The listing agent attached unstamped floor plans to the listing that indicates the unit is 2,020 sf. We checked and the master deed states that the unit is 1,672 sf.
Many people get hung up on price negotiations and take their eye off the ball with respect to what they are actually getting for their money. At 2,020 square feet, the price is $1,435/sf. At 1,672 square feet, the price is $1,734/sf. Either way, the seller got the better end of this deal, it was – Well Sold.
341 Beacon Street, unit 6D – Nice Unit, Mediocre Building – Well Sold
Newly renovated unit 6D at 341 Beacon Street (non river side), a 2,160 square foot 3 bedroom penthouse duplex with two car parking has a new owner after 415 days on the market. The sale price came in at $3.675 million ($1,701/sf), a 12% discount from the original asking price.
The highlights include a 2 car detached garage, two private outdoor spaces and direct elevator access. The kitchen is nicely renovated and with two south facing windows it gets good sunlight.
We’d rate the finishes as middle of the road contractor grade. The third bedroom is on the upper level and lacks a full bathroom, making it impractical as a full time bedroom. We noticed a slope in the floor of the main living area which isn’t uncommon in these buildings, but at this price point, it would drive us crazy.
This is a 23 unit complex which is made up of the combination of three buildings (339, 341, and 343 Beacon). Unit 6D is the largest unit in the building and there are a lot of significantly smaller units which means a lot of doorways in the common hallways. In our view this lends itself to a dormitory feel. We tend to be cautions when it comes to higher end units in buildings with a lot of smaller units. Net, net, it’s a nice unit, but $3.675 million is all the money, we’re calling it – Well Sold.