SKY Everett | 114 Spring Street | Everett

dshoost88

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Holy crap, just a 2 month approval process for Everett vs like 3 years for Boston? That's insane.
And THIS is a cost savings in itself that gets passed along to the resident. The years of litigation, property taxes, impact fees, and architectural redesign costs associated with Boston multi-family large projects have a cost, and are part of the reason the market rate units here become expensive. Compound that with affordable housing minimums, DBE participation requirements, union labor contracts, and a long list of other regulations that affect final costs, and the high rental costs in new construction become more apparent.

The cost of land here must’ve been minimal compared to traditionally transit-oriented sites. I actually have a feeling 1 beds here may list for closer to $1,900-$2,400/mo come opening day (maybe north of $3,000 for the high floors). This’ll be fun to revisit in a few years.
 
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stoweker

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With home prices for purchase so insanely high right now and interest rates very low, I would maybe suggest your company sell or turn-condo their multi-family investments? Free rent isn't crushing "people". Investors aren't getting much sympathy these days as property investing typically leads to people being priced out of homes in a regular market.
can't do that, apartment build =/= condo build quality and it's tough to condo map properties. also urban condos are tough to sell right now. also money paid by renters goes back to pensions / endowments / others, private equity benefits everyone not just landlords.
 

Hubman

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Ugly facade, but I think this would be really good overall for Everett. Especially the commitment to leave room for the Silver Line ROW and station.

That said, I am incredulous that this won't be downgraded to a 5 story apartment building with a convenience store on the ground floor.
 

stoweker

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This construction is not financeable. plain and simple
i have no idea why so many people on this forum think that this is like, actually a real thing that is really going to happen. there will be a strip club in downtown Weston before this thing gets built.
 

stoweker

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This building will be topping out in a year or two and the naysayers will still be saying it was all some kind of mistake.
It’s not a hater issue it’s pragmatism. I’ve worked in commercial real estate for Wall Street firms for almost 20 years, and have seen a lot of deal flow. I can tell you with certainty that this project is a total pipe dream. (1) the sponsor has no - literally zero - experience with development let alone high rise development. No one is giving them money. (2) even if they did, the cost to build a 22 story building will never be justified by the rental rates said project would achieve in an industrial area of Everett with no location specific factors that make it a desirable place to live. (3) no one is coming out of the ground on urban high rise right now until people figure out how unit mix looks in a post covid world. It’s a lingering question for developers - what do people want.

cool, it would look nice I guess, but these people are never getting this thing built. If through some miracle it happens it’s going back to the bank, and if not the equity is taking a bath on it. This is probably #2 stupidest project in Boston behind the St Regis which through some miracle got financed but will likely result in a total wipe out of Jon cronins net worth. But I digress.
 

bigpicture7

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As a complete and total non-expert in this field, it is astonishing the absolutism with which the insiders speak. Don't get me wrong, their logic sounds right, but, being an expert in another (unrelated) field myself, I simply would never speak with such absolutism in my own field - it's frankly impossible to eliminate all unknowns. It's clear here that this commentary is personal for some posters. To their very identity, this project can't work.

Granted, you're probably 99% likely to be correct. But how do you know what these developers' personal networks are? Though they have zero experience on paper, how can you be so sure who else is going to get involved who isn't officially involved yet? How do you know this isn't a pet project for someone, and someone's billionaire uncle isn't going to bankroll this? To your other example, how do you know that Jon Cronin cares about leaving this world with a positive net worth? I legit know wealthy people who fully intend on dying penniless while prioritizing pursuit of cool projects and interesting visions. Not everyone does things by the book, and some have the means and connections to make that happen. You can be mostly sure this project won't work, but you can never be fully sure.
 

stoweker

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As a complete and total non-expert in this field, it is astonishing the absolutism with which the insiders speak. Don't get me wrong, their logic sounds right, but, being an expert in another (unrelated) field myself, I simply would never speak with such absolutism in my own field - it's frankly impossible to eliminate all unknowns. It's clear here that this commentary is personal for some posters. To their very identity, this project can't work.

Granted, you're probably 99% likely to be correct. But how do you know what these developers' personal networks are? Though they have zero experience on paper, how can you be so sure who else is going to get involved who isn't officially involved yet? How do you know this isn't a pet project for someone, and someone's billionaire uncle isn't going to bankroll this? To your other example, how do you know that Jon Cronin cares about leaving this world with a positive net worth? I legit know wealthy people who fully intend on dying penniless while prioritizing pursuit of cool projects and interesting visions. Not everyone does things by the book, and some have the means and connections to make that happen. You can be mostly sure this project won't work, but you can never be fully sure.
Ok, you're right - there could be exogenous factors, who knows. I'm just saying that there is no way that a lender will get comfortable giving money to this project, so unless the sponsor has a rich uncle willing to sink $200MM+ into this project it is very unlikely it will be built. I'm honestly not trying to be negative on this it is just very pollyannish on this forum sometimes in which many posters think that projects get built in sim-city world and don't have an incredibly complicated financial machine behind them that determines whether a project can or should be built. There are a lot of people on this forum who complain about the lack of 1,000 foot towers in the city - FAA aside, we just can't absorb stuff like that at the rates that would be required to justify the construction. This project is one of those - like sure, it's cool on paper, but the financial reality of the situation does not justify the construction of the project.
 

dshoost88

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... No one is giving them money. (2) even if they did, the cost to build a 22 story building will never be justified by the rental rates said project would achieve in an industrial area of Everett with no location specific factors that make it a desirable place to live.
The pragmatic optimist in me disagrees with your statement... specifically that there are "no location specific factors that make it a desirable place to live." Things the site has going for it:
  • It's approved. Cheers!
  • It already has a penthouse tenant signed on (Nick & Nico Varano Restaurant Team)
  • The site has a Walk Score of 90 - Walker's Paradise (it's true). It may not look like Newbury Street at the moment, but make no mistake that this address is in fact in an amenity-rich area.
  • The new Chelsea Commuter Rail Station is opening a 10-minute walk away from here--a one stop seat away from North Station. Add to this the SLX Alternatives Analysis happening right now (last week's presentation here), and it's clear that this is a desirable site for TOD.
  • Your nearby grocery store is literally the largest Market Basket in New England. That is a HUGE selling point for prospective tenants and a favorable consideration for lenders.
  • Probably the most important statistic working in favor of getting financing is the large multi-family vacancy rate in the neighborhood--it's low. Pioneer Everett, One North of Boston - Chelsea, Modera Medford, and other large multi-families relatively close by are routinely rented north of 90% occupancy. The absorption rate of Vero Apartments, Elan Everett, and 1690 Revere Beach Parkway (among others) will be the critical determining factor of when Sky Everett gets financed/constructed. Not if.
  • Momentum - the aforementioned new neighbors going up around this site will only make the area more desirable than it is now. Conley Container Terminal hasn't stopped new development from getting funded in South Boston. And the momentum of that neighborhood transformation the last generation continues.
Everett, Chelsea, Medford, Malden, and Somerville/Assembly areas are the next growth frontier for our region. Developments like Sky Everett are the tip of the iceberg of transformations ahead.
 

bigpicture7

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Ok, you're right - there could be exogenous factors, who knows...
thanks, and don't get me wrong, the insights and commentary from inside experience enrich this forum. The only reason I bothered to call you out on the absolutism is that it makes me question someone's motives when they speak in such extremes - like, are you going out of your way to crap on this because it's a rival project and you want dirt to come up on google when someone searches for it. Backing off the absolutism just slightly helps me take your interesting insights more seriously : )
 

stoweker

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thanks, and don't get me wrong, the insights and commentary from inside experience enrich this forum. The only reason I bothered to call you out on the absolutism is that it makes me question someone's motives when they speak in such extremes - like, are you going out of your way to crap on this because it's a rival project and you want dirt to come up on google when someone searches for it. Backing off the absolutism just slightly helps me take your interesting insights more seriously : )
that's fair with respect to absolutism - who knows, anything can happen. I think it is very unlikely that this project will ever move forward, but i also didn't think that I would spend a year+ working from my home office.

With respect to your other comment, not that it matters but I do very little investing in the Boston market, i just have close personal ties to the city so like to see what's happening and enjoy reading about what gets built in Boston.
 

theSil

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The site has a Walk Score of 90 - Walker's Paradise (it's true)
I’m not saying there aren’t a variety of things within a 15 minute (unpleasant) walk from here, but, man, if this is a 90, Walk Score’s methodology sucks.

I know Walk Score doesn’t take this into account, but to get nearly anywhere from here you need to immediately cross 7 lanes of traffic.
 

stoweker

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The pragmatic optimist in me disagrees with your statement... specifically that there are "no location specific factors that make it a desirable place to live." Things the site has going for it:
  • It's approved. Cheers!
  • It already has a penthouse tenant signed on (Nick & Nico Varano Restaurant Team)
  • The site has a Walk Score of 90 - Walker's Paradise (it's true). It may not look like Newbury Street at the moment, but make no mistake that this address is in fact in an amenity-rich area.
  • The new Chelsea Commuter Rail Station is opening a 10-minute walk away from here--a one stop seat away from North Station. Add to this the SLX Alternatives Analysis happening right now (last week's presentation here), and it's clear that this is a desirable site for TOD.
  • Your nearby grocery store is literally the largest Market Basket in New England. That is a HUGE selling point for prospective tenants and a favorable consideration for lenders.
  • Probably the most important statistic working in favor of getting financing is the large multi-family vacancy rate in the neighborhood--it's low. Pioneer Everett, One North of Boston - Chelsea, Modera Medford, and other large multi-families relatively close by are routinely rented north of 90% occupancy. The absorption rate of Vero Apartments, Elan Everett, and 1690 Revere Beach Parkway (among others) will be the critical determining factor of when Sky Everett gets financed/constructed. Not if.
  • Momentum - the aforementioned new neighbors going up around this site will only make the area more desirable than it is now. Conley Container Terminal hasn't stopped new development from getting funded in South Boston. And the momentum of that neighborhood transformation the last generation continues.
Everett, Chelsea, Medford, Malden, and Somerville/Assembly areas are the next growth frontier for our region. Developments like Sky Everett are the tip of the iceberg of transformations ahead.
super major duper consideration though - the projects you cited are all wrap or podium developments, not high rise. they cost 1/3rd what it costs for high rise construction, and command much lower rents. the redgate stuff has done very well, but the chunk rents are a lot less than what would be needed to justify a tower at this location. I don't disagree that this neighborhood is in the path of growth - it clearly is - but i find it very challenging to believe that there is a deep enough renter pool with deep enoguh pockets to want to live in everett when that same renter could afford to live in a more infill location. From a financing standpoint a rooftop restaurant is a negative as it is incredibly costly to build, will require a lot of parking, and if it goes out of business you have space that is very challenging to repurpose.

And sure, the chelsea rail option is great - and close - i don't disagree with transit optionality for the site - but there is a long way to go before this site becomes optimal for construction. Even when the nieghborhood hits that tipping point I think it is very challenging to believe that it would be possible for the sponsor to line up the financing necessary for a high rise tower.

All that being said, who knows. It has an uphill battle to get built as a 22 story multifamily project but i guess anything is possible.
 

stoweker

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Fenway center, parcel 12, SST were totally never going to happen either, nothing is absolute.
eh, i'd give SST and Parcel 12 a fighting shot from the beginning. I am genuinely surprised that Fenway center got built (at least the portion over the highway) - they got very lucky with the explosion of the lab market in Boston to make that happen; as originally proposed there was no way that would have been doable as traditional office / multi mixed use over highway podium without like serious serious money from the city / state.
 

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