Boston apartments to be built in the thousands
Feb 2011 26

As the economy shifted, it became harder and harder for developers to get financing for new condominium projects. No one wanted to risk their money on new condo developments if they couldn’t guarantee buyers were going to be there. Lenders had clamped down hard on home-buyers, with tightened credit requirements making it difficult for anyone to qualify for a home loan mortgage.

The developers still have land to build on and still have bills to pay, so they’re turning now to building apartment complexes. The financing is easier to get, since banks realize that people have to live somewhere, and if not in condos then in apartments.

Here in Boston, we’re seeing several large, high-profile apartment projects being proposed and about to break ground. Some of these are already approved projects that are modifying their plans, taking out condos and putting in rental apartments. Others are brand new proposals. Driving the new construction is the relatively-easy financing as well as a simple lack of supply – the vacancy rate in Boston is expected to drop to 4.5 percent.

From the New York Times:

In the last several weeks, [Boston] officials have allowed developers of three buildings with nearly 1,000 units to decrease or eliminate condominiums in favor of additional rentals. Over all, the Boston Redevelopment Authority expects construction to start this year on 21 buildings with a total of 1,855 apartments, nearly all rentals, compared with just 600 starts last year. Of those units 830 were once planned as condominiums, said the authority’s director, John Palmieri.

Some of the projects on-tap for downtown Boston include:

Hayward Place – Downtown Crossing across from the Paramount Theater, 265 units (mostly apartments)
(Parcel 24) – Chinatown on Hudson Street, in the shadow of a Rte-93 on-ramp, 345 units (mostly apartments)
Kensington Place – Chinatown on Washington Street (previously the site of the Gaiety Theater), 381 units
Garden Garage Towers – near Boston Garden, part of the Charles River Park complex, 500 units
AvalonBay – on Exeter Street, on the Prudential Center Plaza, another apartment tower, 188 units

This is all good news; increased supply means more options for renters of any age: college graduates, young professionals, empty-nesters.

Whether or not the supply will bring down notoriously-high rents is another question. There seems to be an insatiable demand for apartments, right now. The developer of Hayward Place “said he could build high-quality apartments that would rent for about $5,000 a month.”

How many people are in the position to pay that? Hopefully, it will bring down prices overall, or maybe just keep them from going up?

More: As Boston’s Economy Grows, Demand for Rental Units Outpaces Condo Market, The New York Times

Fourth group bails on Rose Kennedy Greenway developments
Feb 2011 17

Sad news regarding the Rose Kennedy Greenway.

The Boston Globe reports today that the YMCA has canceled its plan to build a new facility on a parcel atop the Rose Kennedy Greenway. It’s the fourth and final organization to pull out after being awarded rights to build. The others are the New Center of Arts and Culture, the Boston Museum, and the Massachusetts Horticultural Society’s “Garden Under Glass”.

The most disturbing part of the announcement is what was said by a city official regarding future plans for the multi-acre swath of land.

I spit up my lunch at this quote:

“The notion that this could be one continuous space, and not subdivided by buildings, is a powerful realization,’’ said Kairos Shen, the city of Boston’s chief planner. “The question now is, how do we make sure there are enough activities on or around the Greenway to bring more people down there?’’

The four parcels set aside for buildings were chosen because they are the sites of off- and on-ramps from and to the now-submerged Central Artery.

Leaving them exposed means no one will be able to enjoy the entire walk from one edge of the Greenway to the other. It won’t be aesthetically pleasing, at all.

This latest development means we are back at square one. The wrong decision would be to not build anything. With a turning economy, perhaps now is the time to hear new proposals. By the time they get going, we should see a lot more spending, both private and public. We can certainly find people to donate money to fund new museums and centers.

I was ambivalent about the YMCA proposal, only because the facility wouldn’t be located in a neighborhood, but beside it (the North End). The other proposals were for projects that could be enjoyed by “everyone”.

But, it’s a moot point. They all failed.

The Greenway was conceived from the beginning as a mix of open space and short buildings to be used by community and cultural organizations.

That’s the only smart decision those in charge of the Greenway have made over the past twenty years!

The image above is from the Boston Globe website. It comes from the Massachusetts Turnpike Authority – because, of course, they’re involved, too

Rare foreclosure auction takes place at Ritz-Carlton Towers, Boston
Feb 2011 15

10:01 PM UPDATED

If you were walking through the Boston Common on the way to the Financial District earlier today you caught a glimpse of something as rare as the white winged dove: a real-life foreclosure auction in the city of Boston.

Unit #906 at 3 Avery Street was set to be auctioned today. I’m getting the information second-hand, but, if sold, it appears the final price was somewhere near $685,000.

The original owner purchased the 1,240-square foot condo back in 2005 for $1.1 million, which was a lot of money for what is a two-bedroom, two-bathroom unit. I’m confused as to why it would be for so much, given what other units were selling for. And, the original loan looks to have been for $1.144 million, more than the actual purchase price. Something was going on there, not sure what.

Subsequently, the loan was refinanced and, apparently, reduced to $805,000, with Mt Washington Bank (now a part of Eastern Bank, according to the public record). But, the owner wasn’t able to keep up with the monthly payments, it seems. In 2007, the owner received a past-due property tax bill from the city of Boston for $6,446, an amount that was never paid off, apparently.

The condo association was also on the hook for past-due condo fees that eventually totaled $21,391.90. With few options, it filed a petition to foreclose. The auction today was the final step in that process.

Five units are currently on the market for prices in the $486-$619 range (three closer to $486 and two closer to $619). Unit #806, which may have the same floorplan but slightly more square footage, is listed at $649,000. Presumably, unit #906 would be “worth” more than that if only for its 1,200-square foot private balcony.

A couple of things of note. For one, the unit is located at 3 Avery Street, so it’s not part of the “main” Ritz-Carlton Towers; it’s across the street. It has its own condo association, the ‘Millennium Place North Low-rise Residential Condominium Association’. Plus, it was originally built as extended-stay units for the hotel and only turned into condos when the real estate market got hot. The interiors were redone and fixtures and appliances upgraded, but the building doesn’t have the “cache” of the other two towers. A great place to live, but you still need to have realistic expectations and recognize its real value.

There hasn’t been a sale at 3 Avery since early 2010, when unit #506 sold for $623,000.

Condo fees in the building run high, from $1.25 to $1.50 per square foot. Even people who spend a million dollars on a property don’t like paying high condo fees, unless the amenities outweigh the costs.

This is a case of something going terribly awry, I’m not sure how.

An interesting event on an otherwise quiet February afternoon.

Oh, and the name of the corporation under which the property was purchased?

Tulip Acquisitions.

There’s a joke there, somewhere.

P.S. The image above is not of the Ritz-Carlton Towers in Boston; it’s from their tower in Hong Kong.

Filene’s building site to become Boston apartment tower?
Jan 2011 27

Will the Filene’s building site become a new apartment tower?

That’s one broker’s prediction.

From a Banker & Tradesman article:

“We think that there’s enough momentum in the market and interest in that site that something will happen this year,” said Thomas Hynes Jr., CEO of Colliers International Boston. “There’s very strong demand in the rental market, and the precedent’s already set on that spine with residential towers right down the street. Whether it gets sold or whether Vornado stays in some capacity … something will happen in that location.”

That’s very interesting. Given that the Colliers’ people probably know everything that’s going on in the city, they are in a position to make valid predictions.

Would a new tower take up all the space laying vacant or just a part of it, with the remainder staying open until the office / hotel market improves?

If a rental tower (or two, or three) does go up, it will be interesting to see who the developer selects as its target market. Rich, singles? Dual-income, no kids? New families?

Given its location, putting residential here would benefit the neighborhood, greatly. 45 Province looks better if more people are living in the ‘hood. An apartment building has been proposed for up at Bromfield and Washington streets above what is now a Payless shoe store and Wendy’s. With three residential buildings in such close proximity, the area would have quite the different feel.

Hopefully, any new residents would realize they are in the commercial / retail district, not on Beacon Hill, and wouldn’t attempt to drain the business life from the area.

The Archstone Boston Common apartment building seems to be full of people who are content with being in a busy neighborhood.

Targeting new families is an excellent idea although I fear the developer won’t be willing to build apartments large enough for a family with children. There may not be enough of these in the city to make it financially viable. Other cities have done this, however, (Vancouver comes to mind) with great success.

They should also consider putting grad-student housing inside, similar to what was done at Trilogy, in the Longwood / Fenway area. Harvard was co-developer (if I’m not mistaken) and put up cash in order to get it built. In return, they have dibs on a significant number of apartments in the building. And, if I’m not mistaken, the grad students have their own entrance.

So, they should build three towers: one for singles / urban professionals (one to two bedrooms, small kitchens); one for new families (two or three bedrooms, with the second bedroom large enough for a 6-10 year old child and the third large enough for a crib (or a nanny!); and one for grad students (studios or small one-bedrooms, kitchenettes, even shared spaces).

The first three floors should include dedicated parking, a BSC gym / fitness facility, Trader Joe’s, Mexican-American take-out (I think Chipotle was there before?), Filene’s Basement (since Vornado “promised them” to put it back), entrance to the Orange / Red Line, and perhaps office space on level 2/3? Maybe even a (gasp!) bookstore?

Image above from Google Maps

Boston Then and Now
Jan 2011 25

Boston.com has a set of images on its website in a sort of “Boston: Then and Now” collage where you can look at photos from Boston’s past and match them up to photos of today.

Very cool way to see how things have, or haven’t, changed in Boston over the past 160 years since the invention of the photographic image.

There is a treasure trove of historic photos online of Boston. You just need to know where to look. The Bostonian Society, for example, has thousands of its images online. So does the Boston Public Library.

For more, send me an email and I can give you some direction.

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