AvalonBay Tower (Jacob Wirth's) | 45 Stuart Street | Downtown

I really wish they would put LEDs up the entire building front, from the entry to the cornice.
 
Wow, it is always just crazy to me how expensive class A apartments are in central Boston. Even DC, another higher income land constrained city, seems cheap by comparison. Good to see the building doing well though.
 
You'd think that with all of these new apartment buildings being built that at some point there will be a limit to the amount of people that can afford or willing to pay those kinds of rents. Will there be an over-saturation of the "luxury" apartment?
 
Yes, absolutely. I imagine that's a concern for luxury apartment buildings that are planning on breaking ground soon, weighing possibility of over-saturation.

If the economy slows down over next two years and thousands of additional units come online in Boston (not to mention Cambridge, Assembly, etc.) the whole business model for the building will not be realized. This would, in theory, benefit the renters with lower rent prices and more competition. But as it stands now, demand is strong and has been for years.
 
mdd said:
You'd think that with all of these new apartment buildings being built that at some point there will be a limit to the amount of people that can afford or willing to pay those kinds of rents. Will there be an over-saturation of the "luxury" apartment?
Click to expand...

We aren't talking huge numbers here. Think of it in the context of a young, moderately successful couple(32ish making ~$200k/year). They're a dime a dozen in Boston and correspondingly a place like this is easy for them.
 
^^ Agreed. The area median income for Greater Boston is something like $70,000/year. The rule of thumb realtors and renters go by in Boston (aka the Rule of 36) is that your monthly rent should not exceed 1/36 of your pretax annual salary. Going by that rule, the average person here can technically afford around $2,000/mo rent. Looking at the new luxury inventory here ($2600-$3400/mo for a 1-bed), their attractive amenities (onsite gym, covered parking, rooftop lounges, etc), and the cost-saving move-in deals (1-, 2-, or even 3 months free rent, only $500-$1000 security deposit up front, and even several now paying the brokers fee), the adjusted cost of living in these new buildings is really attractive AND affordable for a large chunk of the population. Not all of them, but enough of them that the momentum isn't about to die off.

Who would've expected Kensington to fill up in 11 months, right? The demand is here.
 
It's also worth remembering that Boston's population is increasing rapidly, from about 617,000 in 2010 to an estimated 656,000 last year--over 6% in just 4 years, and I bet most of those are relatively high income folks. (The increase between 2000 and 2010 was less than 5%, at least according to Wikipedia.)
 
dshoost88 said:
^^ Agreed. The area median income for Greater Boston is something like $70,000/year. The rule of thumb realtors and renters go by in Boston (aka the Rule of 36) is that your monthly rent should not exceed 1/36 of your pretax annual salary. Going by that rule, the average person here can technically afford around $2,000/mo rent. Looking at the new luxury inventory here ($2600-$3400/mo for a 1-bed), their attractive amenities (onsite gym, covered parking, rooftop lounges, etc), and the cost-saving move-in deals (1-, 2-, or even 3 months free rent, only $500-$1000 security deposit up front, and even several now paying the brokers fee), the adjusted cost of living in these new buildings is really attractive AND affordable for a large chunk of the population. Not all of them, but enough of them that the momentum isn't about to die off.

Who would've expected Kensington to fill up in 11 months, right? The demand is here.
Click to expand...

Are you saying that someone making $70K can comfortably afford $2K/month?
 
^ Applying the rule of 36 to pre-tax income is a recipe for financial ruin.
 
I should have said "up to"... As in their monthly rent should not exceed 1/36th of their annual pretax income. In cities like Boston, SF, and NY where the available housing stock is tight, this is the typical rule. Even if you fall into that category, though, there are still no shortage of renters that get a co-signer on their leases for added protection.
 
Keep in mind too the pronounced trend of vanguard Millennials preferring city-living to buying a house in the burbs. This topic has been discussed ad nauseum on SSP; five of the Big 6 (Philly always lags the others), plus Seattle, are seeing core growth like we haven't seen since the late 40s. And it's young people who can afford to live in the core of these top markets who are driving the growth. A couple hundred luxury units (and in my mind, USD 2,000 a month, regardless of the space you're getting, doesn't qualify as "luxury") aren't going to make a dent in overall demand.

Here's the latest thread covering a related topic: Urban Core Growth, 2000-2010. Out of all metros with 1 million or more people (I believe there are 54 in total with 1 million+), Boston ranked 5th both in terms of raw population added AND in terms of percentage growth.

Raw Growth Top 10:
1. New York
2. Los Angeles
3. Washington
4. Seattle
5. Boston
6. Miami
7. San Francisco
8. Portland
9. San Jose
10. San Diego

Percentage Growth Top 10:
1. Seattle
2. Washington
3. Portland
4. New York
5. Boston
6. San Francisco
7. Miami
8. San Jose
9. Austin and Los Angeles (tie)
 
shawn said:
Keep in mind too the pronounced trend of vanguard Millennials preferring city-living to buying a house in the burbs. This topic has been discussed ad nauseum on SSP; five of the Big 6 (Philly always lags the others), plus Seattle, are seeing core growth like we haven't seen since the late 40s. And it's young people who can afford to live in the core of these top markets who are driving the growth. A couple hundred luxury units (and in my mind, USD 2,000 a month, regardless of the space you're getting, doesn't qualify as "luxury") aren't going to make a dent in overall demand.

Here's the latest thread covering a related topic: Urban Core Growth, 2000-2010. Out of all metros with 1 million or more people (I believe there are 54 in total with 1 million+), Boston ranked 5th both in terms of raw population added AND in terms of percentage growth.

Raw Growth Top 10:
1. New York
2. Los Angeles
3. Washington
4. Seattle
5. Boston
6. Miami
7. San Francisco
8. Portland
9. San Jose
10. San Diego

Percentage Growth Top 10:
1. Seattle
2. Washington
3. Portland
4. New York
5. Boston
6. San Francisco
7. Miami
8. San Jose
9. Austin and Los Angeles (tie)
Click to expand...

Totally off-topic, but it baffles me that Chicago isn't growing like these other metros. I guess it is just so massive a city that losses in the dodgy parts have offset the obvious gains in the core.
 
jpdivola said:
Wow, it is always just crazy to me how expensive class A apartments are in central Boston. Even DC, another higher income land constrained city, seems cheap by comparison. Good to see the building doing well though.
Click to expand...

mdd said:
You'd think that with all of these new apartment buildings being built that at some point there will be a limit to the amount of people that can afford or willing to pay those kinds of rents. Will there be an over-saturation of the "luxury" apartment?
Click to expand...

Reznor said:
Yes, absolutely. I imagine that's a concern for luxury apartment buildings that are planning on breaking ground soon, weighing possibility of over-saturation.

If the economy slows down over next two years and thousands of additional units come online in Boston (not to mention Cambridge, Assembly, etc.) the whole business model for the building will not be realized. This would, in theory, benefit the renters with lower rent prices and more competition. But as it stands now, demand is strong and has been for years.
Click to expand...

Isn't DC also building much faster than we are? Are the units they're building comparable to the small-but-amenity loaded units we're building here?

No doubt, there'll be pretty consistent demand for years to come, but what comes after luxury rental market saturation? Do we start getting more buildings like mine, 225 Centre St in Roxbury/JP - reasonably-sized 1-, 2-, 3- bedrooms with limited amenities, no concierge, but amazing proximity to transit?

And bringing it back to Chinatown, is it even feasible/motivation for developers to build like that here in the remaining underutilised parcels?
 
how in this "historic" city does zoning allow for that garish "now leasing" sign? I didn't like the one on 45 Province either but at least some thought went into that design and it was covering up an otherwise blank wall.
 
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