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Re: Battery Wharf
Buyers slow to move on new luxury condos
Friday, May 9, 2008
Boston Business Journal - by Lisa van der Pool
Handpicked white Italian marble, 2 1/2 baths, mahogany floors, a 60-foot-long balcony and views of Bunker Hill and the USS Constitution are a few of the luxurious amenities in a new penthouse condo at Battery Wharf.
The 1,814-square-foot unit's price tag: $2.5 million. So far, no one is enjoying that view.
"Volume is down -- but prices are relatively firm," said sales manager David Theran, of the property's sales activity. "We think it's going to pick up."
While sellers say that the luxury-condo market is near bullet-proof, sales data on high-end condos is showing a few holes.
Recent numbers reflect a decelerating market where even luxury condos aren't moving quickly. New construction projects, such as the one at Battery Wharf, have not yet sold out and have become vulnerable to location variables.
The luxury-market's weakness is largely due to a sales slide in mid-market luxury units, or those priced between $800,000 and $2 million, and the depressed real estate market in general, according to industry-watchers.
Boston's condo sales saw a 22 percent year-over-year drop in the first quarter, falling to 513 units from 660 units in 2007's corresponding period, according to Boston-based real estate firm Listing Information Network. Meanwhile, sales for condos priced from $1.75 million to $2 million have slipped over the last 12 months, with 27 condos selling from May 1, 2007, to April 30, 2008, down from 37 condos sold the previous year, according to the MLS Property Information Network.
Another concerning sign: inventory of condos priced between $700,000 and $3 million increased to 917 units as of April 30, up 3 percent from the 891 unsold condos in that bracket a year earlier.
At Battery Wharf, where some units were pre-sold before construction began in 2004, just under 60 percent of its 104 condo units are under agreement. Deposits for sold properties range from $100,000 to $200,000.
In recent days, about 20 units have closed and construction will be completed later this year.
Current prices range from $1.15 million to $2.98 million; condos that were listed above $2.98 million have already sold.
The average price per square foot is $1,200, but sales have ranged from around $850 to $1,400 per square foot, according to Theran, who would not say whether original listing prices have been lowered.
"People are much slower to make a decision," said Francois Nivaud, a hotel consultant overseeing the financing of Battery Wharf. He expects sales to pick up when the Regent Boston hotel at Battery Wharf opens this summer. "There's no question that the pace has slowed, but those are typical peaks and valleys."
Debra Taylor Blair, president of the Listing Information Network, says it's logical that projects outside of the hot areas of the Back Bay and South End might suffer a bit in a slower market.
"More established neighborhoods in the high-end condo market are doing remarkably well relative to the rest of the market," said Blair. "Areas taking the hits tend to be the new construction in neighborhoods that don't have a strong residential foundation yet."
Newer projects seem to be suffering from the fact that today's buyers are less inclined to purchase units sight-unseen, according to Mark Lippolt, executive vice president and chief administration officer at Coldwell Banker Residential Brokerage. Lippolt notes that while sales of high-end condos are strong, inventories are still up compared to recent years.
"Here's where the challenge is," said Lippolt. "Inventory is up compared to where it was the same time last year and that has an impact on the perception of the market and the absorption rate."
According to Lippolt, even luxury prices are negotiable in this market: "We're seeing that there's perhaps a wider spread between asking prices and selling prices. The aggressive initial prices are not being supported by the market."
On the market for 20 months, luxury condo project 45 Province -- which boasts an on-site spa, swimming pool and rooftop garden -- has sold approximately 25 percent of the first 33 units released by the project. The site is slated to have 136 total units and is expected to be complete in the spring of 2009.
Units range in price from $500,000 to $5.5 million. Price per square foot ranges from the mid-$700's to $2,000.
Sales have been "steady" this year at about 1.5 units per month, said David Epstein, president and chief operating officer of The Abbey Group, the developer of 45 Province. Epstein hopes that in the coming months his project will begin selling two to three units per month.
"What you're seeing in this market is that perfectly located and well-designed product is moving -- Back Bay and South End are doing fine," said Jon Gollinger, president of real estate auction firm Accelerated Marketing Partners Inc. in Charlestown.
"But you're going to pay the price if you're not perfect. You start getting deductions in price points and speed of absorption."
Recent condo "auctions," including the Gollinger-orchestrated event at 14-story Folio Boston in the Financial District, which generated about $26 million in sales in less than two hours, also demonstrate the luxury-condo market's vulnerability.
His company is also handling the upcoming condo auction of The Modern in the South End.
At the Intercontinental Boston, about 111 condos have sold out of 130. Those sales total around $160 million, said Kevin Ahearn, president of real estate firm Otis & Ahearn Inc. in Boston. Pricing per square foot has ranged from the mid-$900's to the low $1,000's.
While Ahearn acknowledged that first quarter sales were slower than usual, he said the high-end market in general is "rock solid."
Meanwhile luxury condo development The Clarendon in the Back Bay began selling units recently and to date has 10 of its 100 condos under agreement, according to Robert Beal, president of The Beal Companies LLP in Boston.Beal would not disclose a price range, but real estate brokers say sales have ranged between $675,000 to $4.6 million.
Lisa van der Pool can be reached at lvanderpool@bizjournals.com.
http://www.bizjournals.com/albany/o...s/2008/05/12/story2.html?b=1210564800^1632617
Buyers slow to move on new luxury condos
Friday, May 9, 2008
Boston Business Journal - by Lisa van der Pool
Handpicked white Italian marble, 2 1/2 baths, mahogany floors, a 60-foot-long balcony and views of Bunker Hill and the USS Constitution are a few of the luxurious amenities in a new penthouse condo at Battery Wharf.
The 1,814-square-foot unit's price tag: $2.5 million. So far, no one is enjoying that view.
"Volume is down -- but prices are relatively firm," said sales manager David Theran, of the property's sales activity. "We think it's going to pick up."
While sellers say that the luxury-condo market is near bullet-proof, sales data on high-end condos is showing a few holes.
Recent numbers reflect a decelerating market where even luxury condos aren't moving quickly. New construction projects, such as the one at Battery Wharf, have not yet sold out and have become vulnerable to location variables.
The luxury-market's weakness is largely due to a sales slide in mid-market luxury units, or those priced between $800,000 and $2 million, and the depressed real estate market in general, according to industry-watchers.
Boston's condo sales saw a 22 percent year-over-year drop in the first quarter, falling to 513 units from 660 units in 2007's corresponding period, according to Boston-based real estate firm Listing Information Network. Meanwhile, sales for condos priced from $1.75 million to $2 million have slipped over the last 12 months, with 27 condos selling from May 1, 2007, to April 30, 2008, down from 37 condos sold the previous year, according to the MLS Property Information Network.
Another concerning sign: inventory of condos priced between $700,000 and $3 million increased to 917 units as of April 30, up 3 percent from the 891 unsold condos in that bracket a year earlier.
At Battery Wharf, where some units were pre-sold before construction began in 2004, just under 60 percent of its 104 condo units are under agreement. Deposits for sold properties range from $100,000 to $200,000.
In recent days, about 20 units have closed and construction will be completed later this year.
Current prices range from $1.15 million to $2.98 million; condos that were listed above $2.98 million have already sold.
The average price per square foot is $1,200, but sales have ranged from around $850 to $1,400 per square foot, according to Theran, who would not say whether original listing prices have been lowered.
"People are much slower to make a decision," said Francois Nivaud, a hotel consultant overseeing the financing of Battery Wharf. He expects sales to pick up when the Regent Boston hotel at Battery Wharf opens this summer. "There's no question that the pace has slowed, but those are typical peaks and valleys."
Debra Taylor Blair, president of the Listing Information Network, says it's logical that projects outside of the hot areas of the Back Bay and South End might suffer a bit in a slower market.
"More established neighborhoods in the high-end condo market are doing remarkably well relative to the rest of the market," said Blair. "Areas taking the hits tend to be the new construction in neighborhoods that don't have a strong residential foundation yet."
Newer projects seem to be suffering from the fact that today's buyers are less inclined to purchase units sight-unseen, according to Mark Lippolt, executive vice president and chief administration officer at Coldwell Banker Residential Brokerage. Lippolt notes that while sales of high-end condos are strong, inventories are still up compared to recent years.
"Here's where the challenge is," said Lippolt. "Inventory is up compared to where it was the same time last year and that has an impact on the perception of the market and the absorption rate."
According to Lippolt, even luxury prices are negotiable in this market: "We're seeing that there's perhaps a wider spread between asking prices and selling prices. The aggressive initial prices are not being supported by the market."
On the market for 20 months, luxury condo project 45 Province -- which boasts an on-site spa, swimming pool and rooftop garden -- has sold approximately 25 percent of the first 33 units released by the project. The site is slated to have 136 total units and is expected to be complete in the spring of 2009.
Units range in price from $500,000 to $5.5 million. Price per square foot ranges from the mid-$700's to $2,000.
Sales have been "steady" this year at about 1.5 units per month, said David Epstein, president and chief operating officer of The Abbey Group, the developer of 45 Province. Epstein hopes that in the coming months his project will begin selling two to three units per month.
"What you're seeing in this market is that perfectly located and well-designed product is moving -- Back Bay and South End are doing fine," said Jon Gollinger, president of real estate auction firm Accelerated Marketing Partners Inc. in Charlestown.
"But you're going to pay the price if you're not perfect. You start getting deductions in price points and speed of absorption."
Recent condo "auctions," including the Gollinger-orchestrated event at 14-story Folio Boston in the Financial District, which generated about $26 million in sales in less than two hours, also demonstrate the luxury-condo market's vulnerability.
His company is also handling the upcoming condo auction of The Modern in the South End.
At the Intercontinental Boston, about 111 condos have sold out of 130. Those sales total around $160 million, said Kevin Ahearn, president of real estate firm Otis & Ahearn Inc. in Boston. Pricing per square foot has ranged from the mid-$900's to the low $1,000's.
While Ahearn acknowledged that first quarter sales were slower than usual, he said the high-end market in general is "rock solid."
Meanwhile luxury condo development The Clarendon in the Back Bay began selling units recently and to date has 10 of its 100 condos under agreement, according to Robert Beal, president of The Beal Companies LLP in Boston.Beal would not disclose a price range, but real estate brokers say sales have ranged between $675,000 to $4.6 million.
Lisa van der Pool can be reached at lvanderpool@bizjournals.com.
http://www.bizjournals.com/albany/o...s/2008/05/12/story2.html?b=1210564800^1632617
