Re: Atlantic Wharf (formerly Russia Wharf)
I just mean it's hard to call something a success if it doesn't make money if only because it will never be replicated if it's not profitable.
Articles about FP3 sales from 1-2 years ago were dismal.
In 2009, things seem to be looking better.
Whatever the case, I'd call Berkeley's adaptive reuse project an amazing success as well as Beacon's Channel Center.
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Something Is Going On'
One Boston Condo Developer Didn't Panic, Found Success
Fort Point's FP3 Project Seeing Sales Increase During Downturn
By Paul McMorrow
Banker & Tradesman Staff Writer
11/16/09
FP3, the 92-unit condominium project in Boston?s Fort Point neighborhood,
came online weeks before the bottom fell out of the city?s red-hot condo
market. Last year set records for big condo deals, but an economy limping
along on life support put an end to that. Transactions tumbled by upwards of
60 percent. New condo construction became un-financeable, and real estate
observers took to talking about large blocks of unsold units like an
albatross around developers? necks.
FP3?s developer, Berkeley Investments, didn?t panic. Berkeley overhauled the
project?s marketing, trimmed prices and resolved to work through the
doldrums. They emphasized the warehouse-and-infill project?s location,
award-winning architecture, amenities (including two new Barbara Lynch
establishments) and value.
That strategy is now paying dividends.
Some new condo developments have spent much of the year averaging less than
one sale per month; Berkeley was doing two to three during the summer, and
closed seven in October. Three more are under agreement, and four others are
being held on reservation. Berkeley believes FP3 is the busiest new condo
development in town.
No Quick Turnaround
?It didn?t happen overnight,? said Berkeley principal Young Park. He said
the project?s repositioning efforts had an eye on ?the intrinsic value of
FP3, given the market, the neighborhood and our building. It was clear, from
our perspective, that the project offers something very unique.?
?We are confident in our optimism that the market is getting better,? added
Joseph Laurano, director of operations for Berkeley?s residential marketing
group. After a strong autumn, Laurano predicted FP3 will hit the 51 percent
sold mark in the coming months, allowing Berkeley to tap a much wider pool
of buyers with Fannie Mae-backed financing.
?The momentum is building off itself. We have good value and good momentum.?
Building momentum isn?t necessarily the go-to plan at Boston-area condo
developments. Year-to-date condo sales in Boston are off last year?s pace by
16 percent, according to data from The Warren Group, publisher of Banker &
Tradesman. Statewide year-to-date condo sales have also slowed by 16
percent. The owners of a few high-profile new developments have responded to
that slowdown by putting some, or all, of their units on the auction block *
often at steep discounts. Others have backed off condos altogether, and
converted to rentals.
Early in the spring, Berkeley committed to a strategy of trimming prices by
an average of 15 percent, and working through the sales process steadily.
Park said Berkeley decided to discount the project?s lower floors, believing
?it was not the time to be pushing million-dollar-plus penthouse units. For
them to be successful, we had to firm up the base.?
Reengaging The Community
Laurano credited the swell in activity to a decision Berkeley made several
months ago to bring their marketing operations in-house. As head of
Berkeley?s new ResMark unit, Laurano reengaged Boston?s brokerage community,
launching an event-based marketing effort that established firm links
between the project and Fort Point?s arts and fashion scene. They saw foot
traffic nearly double right off the bat.
He said ResMark also worked hard to combat the notion that FP3 was a tough
place to do a deal.
?Whether it was true or not, we worked hard to change that perception,? he
said. Berkeley now is tossing in extras like free parking and prepaid condo
fees to get deals to closing.
?We are flexible. We are reasonable. If we are close, we will make it
happen.?
?In the condo landscape, as devastated as it was, there were opportunities
to attract people who sought value,? Park said. Berkeley bet that price
points and supply and demand fundamentals were in their favor. Laurano is
seeing tremendous activity in studios, one-bedrooms and one-bedroom-plus
units priced in the $300,000 to $700,000 range. Penthouse units, with
commanding views of the Boston skyline and Fort Point?s brick-and-beam
warehouses, are priced under $1,000 per-square-foot.
?Something is going on,? Laurano said. ?We closed seven in the month, and
we?re not giving them away.? He added, ?The sense of urgency has returned to
this building. Folks will come on Sunday for an open house, and by the time
they zero in on three or four units, their top two are gone. They almost
don?t believe you.?
?It?s picking up, but it?s very value-conscious,? Park added. ?You can?t
blame buyers for wanting the best deal. Because there?s no new supply,
people will naturally navigate to projects that have the right combination
of immediate value and long-term growth potential.?
In September, Massachusetts saw its first year-over-year increase in condo
sales volume in more than two years, according to Warren Group data. Sales
volume in the third quarter was down 3 percent year-over-year, compared to a
16 percent year-to-date slide.
?Time is on our side now,? Laurano said. He predicted upward pressure on
pricing in the spring, thanks to dwindling new supply and a growing pool of
buyers.
Park argued that most condo auctions have been the result of lender
pressure.
?We not only met lender requirements, but we also refinanced our
construction loan in pretty tough market conditions,? he said. ?Do we wish
the market was more positive? We all share that hope. But it is what it is.
We?re certainly not losing sleep over it. There are opportunities in the
marketplace. The key is executing well what you have in your portfolio
today, so you can take advantage of the opportunities tomorrow.?
