Winthrop Center | 115 Winthrop Square | Financial District

Are construction sites back up and running? It seems like from the pictures that some are and some aren't in Boston.
 
stoweker said:
I've worked in real estate private equity for 15 years and have literally never heard anyone refer to a purchase and sale agreement as anything other than a PSA. I'm 99.9999% sure that P&S only gets used in residential real estate.
Click to expand...

Shows how little I know, eh? Thanks for that clarification... just an alphabet soup of acronyms around here.

Anyway: I don't know if this has been said upthread, but, I think the BPDA missed an opportunity with the recent story on this:

1.) In the wake of Vornado's Filene's Pit debacle, there was talk about how the BPDA (then BRA) was instituting reforms to ensure such a thing would never happen again. I thought the phrase "performance bonds" was tossed around, but could be mistaken.

2.) And yet, there's nary a statement from the BPDA in the story of how those reforms are involved with the current financing issue with Winthrop Center Tower... only a statement that "officials from the BPDA said they plan to closely scrutinize Millennium's financing plan." So, they're going to use a microscope, instead of a monocle?

3.) So... what happened? what gives? curious...
 
Last edited:
DBM said:
3.) So... what happened? what gives? curious...
Click to expand...
COVID happened.

The single most severe economic shock in the memory of anybody alive today happened to explode just as the structure was starting to rise above ground level. Given the *off the charts* level of uncertainty that this unprecedented crisis brought about, you really can't fault Millennium and its investors for scrambling a bit all of a sudden. And "scrambling" is just what they're doing; nothing is final and this project isn't dead yet. As with everything in this crisis, we'll have to wait and see.

I can't imagine any possible financing plan that wouldn't lead to scrambling now on this project, given where it is along its development timeline. Millennium could have 100% cash on hand and they'd still be scrambling. And the amount of insurance that would have been required to totally insulate this project from the uncertainty brought about by COVID would have made the numbers never pencil out in the first place.
 
Last edited:
^^^^
Lets stick to the architecture of the building this is border line leading off topic into other factors about the project.

There is a Covid -19 thread to follow up on the projects. BRA and other types of comments only lead to the politics of the project.

What are you the Rifleman?
 
Johnnyrocket891 said:
^^^^
Lets stick to the architecture of the building this is border line leading off topic into other factors about the project.

There is a Covid -19 thread to follow up on the projects. BRA and other types of comments only lead to the politics of the project.

What are you the Rifleman?
Click to expand...

The architecture of the project is poised to change dramatically... precisely because of the financing issue. The two phenomena are inextricably intertwined; to look at the architecture in isolation, at this present juncture, without further clarification from the developers/BPDA re: the financing issue, is to abstract it to a point where you might as well be looking at a balsa-wood model of it in the BPDA Model Room, instead of the very messy, fluctuating, concrete/glass/rebar reality.

And, this is one of the most politicized development projects in modern Boston history, in a city where developments are politicized to an exceptional degree (for better or worse). Upthread are hundreds and hundreds of politics-filled posts--are you saying they were all "off-topic" and should be expunged from the thread?
 
Why would they reduce the height if the units were condos? I'm trying to figure out the economics...

The project was reduce by:
~100,000 sqft
~$80,000,000 construction cost
~66 units

The math works out to roughly $800/sqft for 66 1515sqft units, add in lets say $100/sqft for interest on loans, marketing, and broker sales fee, etc. thats still only $900/sqft. Meanwhile average price/sqft for new construction high-end condos is like $1500/sqft.

What am I missing?
 
Seems like they didn't have financing in place pre-covid, which is strange, but they must know, or be comfortable, that they can finance rentals instead.
 
Seems hard to tell what's being put in first. Foundation, Elevator shafts, Garage, Lobby:unsure:?
 
The changes will reduce construction costs by about $80 million, Larkin said, and may make the project more appealing to investors who are wary of financing luxury condominiums in this climate. Approval won’t guarantee funding, he said, but it would definitely improve the odds."

“We’re very confident with these changes that the project will be financed and move forward,” he said."
Globe


Yikes so theyre waiting on funding still. The BPDA has to sign off on the changes as well.

As far as the housing crisis, I feel like apartments are much more likely to actually house people looking to live there, vs condos which you own and many times are just diverse assets to rich people and can sit empty. It would make no sense to pay rent on an apartment if youre not going to live there, so I like this change with regards to the housing crisis.
 
6.22.20

D969A764-6507-4282-8AD5-75A6DDBF065C.jpeg

1123BDB4-E516-43F5-9740-33D0A3E9B8C0.jpeg

EBE22CA5-9FD1-425E-A5F8-3AFE23522927.jpeg
 
What are the chances they plow ahead self funded? Double cranes already on site etc.
 
Has there been progress made on this? It's hard to tell from pictures, and even from driving by.
 
stoweker said:
0.0000000% chance. there are like maybe 15 firms globally that could move forward with a project of this size using balance sheet and no leverage. MP isn't one of them. Also pivot from condos is probably smart, but urban core apartments are going through a really tough patch right now - there's a resident flight to the burbs. maybe temporary, but who knows.

as an aside, the construction lending market just doesn't exist at this point - the traditional lenders for this product are out of the market (or too expensive) and the office component is a huge ?????? that won't get addressed.

i bet a nickle that they pack up stuff on this soon and we get a hole in the ground until the next cycle. hope i get proven wrong but can't see this thing moving forward now.
Click to expand...

Don't be so negative- MP got this,
Maybe the city & state can allow a 15 year tax abatement
Until the numbers work. Maybe some subsidized housing availability for the citizens of Boston?

How can the city go from a housing crisis to a hole in the city in 3 months?
 
Johnnyrocket891 said:
Don't be so negative- MP got this,
Maybe the city & state can allow a 15 year tax abatement
Until the numbers work. Maybe some subsidized housing availability for the citizens of Boston?

How can the city go from a housing crisis to a hole in the city in 3 months?
Click to expand...

bc this project is mainly office space. Wasn’t there a hotel in there too? Those aren’t doing well either. it probably wouldn’t be as much of an issue if this whole thing was residential. But again living in a neighborhood like this isn’t exactly ideal right now.
 
stoweker said:
0.0000000% chance. there are like maybe 15 firms globally that could move forward with a project of this size using balance sheet and no leverage. MP isn't one of them. Also pivot from condos is probably smart, but urban core apartments are going through a really tough patch right now - there's a resident flight to the burbs. maybe temporary, but who knows.

as an aside, the construction lending market just doesn't exist at this point - the traditional lenders for this product are out of the market (or too expensive) and the office component is a huge ?????? that won't get addressed.

i bet a nickle that they pack up stuff on this soon and we get a hole in the ground until the next cycle. hope i get proven wrong but can't see this thing moving forward now.
Click to expand...
Stoweker -- Not sure where you get your Surety of Knowledge

Think about the fact that there is essentially 1/3 of the US GDP now flowing into a hole looking for somewhere to reside -- the Treasury and the Fed together are pouring $7T -- Boston is as good a place as anywhere for a scant $1B to find a home
 
No seriously everything will be fine on this. Negative rates are coming.
This is job creation.

Maybe MP can apply for the PPP loan?
 
kmp1284 said:
Perhaps but I think it’s a safe bet that the high end market isn't going to roar back to life at a rate that will support significant sales volume here and at other new projects like 40 Trinity and 150 Seaport(especially when factoring in resales with the opportunity for immediate occupancy at MT, One Dalton and elsewhere in the Seaport).
Click to expand...

Well, everybody who always complained about downtown luxury towers said that they never had any residents. If that had been true, then I suppose the market for empty money laundering/parking units would continue to exist.
 
stoweker said:
i mean, i work for a CRE megafund and see a ton of deal flow. debt capital markets are freaked out about construction lending right now, credit is super expensive and the last thing that lenders like is uncertainty. they get paid to NOT take risks on stuff, and there is way way way too much going on to finance a project this size. Furthermore the big syndicates that would take pieces of a deal this size are kind of out of the market because of all the junk they need to deal with in their existing book, they're not going to float a $700MM loan on a ground up deal that's a total flier right now. THink about it - spec office, luxury condo / apartment, huge check. It's a potential recipe for a giant default, and lenders don't want to touch that.
Click to expand...
Stoweker -- how can credit be "Superexpensive" -- the long bond is nearly free of interest -- I've looked at Interest Rates for multiple decades and its never even been in the same ballpark as today's cheapness -- the cost of credit is embarrassingly low [now perhaps there are issues as to how available it is for certain classes of assets used as collateral]

for ref purposes here are today 06/24/20 AM EDT yields for Treasury Bonds:
courtesy Bloomberg
NAMECOUPONPRICEYIELD1 MONTH1 YEARTIME (EDT)
GB3:GOV
3 Month		0.000.130.14%+3-19710:50 AM
GB6:GOV
6 Month		0.000.160.16%+2-18910:50 AM
GB12:GOV
12 Month		0.000.170.17%+1-17510:49 AM
GT2:GOV
2 Year		0.1399.880.19%+2-15410:50 AM
GT5:GOV
5 Year		0.2599.630.33%-1-14210:50 AM
GT10:GOV
10 Year		0.6399.310.70%+4-13210:50 AM
GT30:GOV
30 Year		1.2594.941.46%+9-10910:50 AM

Note that when you factor in even a 1% inflation rate -- the true interest for the Treasury is 0% or even Negative
and the Fed Rates
Federal Reserve Rates
RATECURRENT1 YEAR PRIOR
FDFD:IND
Fed Funds Rate		--2.36
FDTR:IND
Fed Reserve Target		0.252.50
PRIME:IND
Prime Rate		3.255.50
 
You must log in or register to reply here.

Back
Top