We’ve been receiving inquiries related to the latest sales at FP3.  Over the past 6 months, according to LINK (which does a scan of the Registry of Deeds on a regular basis), the only units that have closed in the building have been the affordable housing units.  Condo developers, by choice, opt-in to the affordable housing program sponsored by the Boston Redevelopment Authority (BRA). FP3 participated in the affordable housing program, and units deemed affordable went to a lottery and since have closed – no further affordable housing options are available at FP3.

On the market-rate front, list prices were lowered on several units this week.  For instance, unit 311, an 850 square foot one-bedroom one-bathroom was reduced from $489,000 to $449,000, unit 205, a 1,031 square foot one-bedroom two-bathroom unit was reduced from $599,000 to $499,000, and unit 215, a 1,382 square foot two-bedroom two-bathroom unit was reduced from $719,000 to $699,000.  According to LINK, 16 of the 92 loft-style condos at FP3 have sold (17%).

Following the last closing at the Modern, a 25-unit condo development that opened in 2007, that took place in August 2008, Buyer are only now seeing the first resale condo available for sale in the building.  Unit 203, a 1,000 square foot one-bedroom one-bathroom unit was listed for sale in late January 2009, and recently underwent a $10,000 price reduction, bringing its list price to $479,000 (approximately $479 per square foot).

The unit is well equipped, with some additional upgrades, including a Bosch washer / dryer, custom Hunter Douglas blinds, custom closet system, small private terrace, and one garage parking space.  The Seller is offering six months of condo fees as an incentive to purchase, which equates to a $1,455 credit at the closing table.

Perhaps the one negative aspect to the south-facing unit (see floorplan 147 KB PDF) is that it overlooks the adjacent gas station.  The building itself is elevator-served, has a large common roofdeck, and there are still plans on the table to do a second phase of the development sometime in the future.

Monday marked the completion of developer unit sales at Broadluxe, which represents one of the shortest building sales cycles in some time.   We had the chance to catch up with Brecht Palombo, Broker and Auctioneer of Tranzon Auction Properties, who played an integral role in the auction of Broadluxe, and post auction sales coordination. Broadluxe, a 44-unit loft-style condo development in the heart of the Financial District, was brought to auction on June 21, 2008 after a short marketing blitz.  The event was the most significant Boston condo auction of 2008, and was considered a success by many after Tranzon was able to sell 60%+ of the property on auction day, as well as making quick work of the remaining units for sale in the building post auction.

Can you tell us a little about Tranzon and your role with the firm?

Brecht Palombo: Tranzon is the premier national network of independently operated real estate auction firms. Tranzon Auction Properties operates throughout New England with a headquarters in Portland Maine and with my offices in Lexington Massachusetts. My team in Lexington is responsible for driving new business relationships in Massachusetts, Rhode Island and Connecticut and we service all of the southern New England auction business that’s written out of our headquarters.

How were you involved in the Broadluxe auction process?

Brecht Palombo: I was intimately involved with every aspect of the Broadluxe auction process starting with communicating with the developer when he was in default back before any real foreclosure proceedings began, through every aspect of the foreclosure auction, then through every aspect of the REO auction and finally I handled all of the negotiated sales of the remaining units after the auction. I worked with the lender, debtor, and lender’s counsel at Riemer and Braunstein etc. I was deeply involved.

What were some of the main factors that contributed to deciding when the auction took place, how long the property was open to the public before the auction, and the mechanisms by which you marketed and promoted the sale?

Brecht Palombo: The client determines when an auction takes place based on their business needs. The campaign lasted 27 days. The auction process is about controlling time and terms. The auction marketing process involves a broad, deep, and rapid exposure to the market on a very condensed time frame. In this case we relied heavily on technology, specifically a variety of online marketing initiatives, to promote the sale.

Was the auction considered a success, and if so, why?

Brecht Palombo: Absolutely. An auction is about a rapid recovery of capital. This campaign recovered two-thirds of appraised value in the first 30 days and recovered a total of 93% of the appraised value in 180 days according to the lender’s own internal documents. I’d point out that the appraisals we are working from were done in April/May of 2008, and Boston condo prices in this area have fallen during that time.

What was the biggest surprise that you ran into on auction day?

Brecht Palombo: There weren’t too many surprises but I guess I would say that what we saw was a number of successful bidders decided on the spot that they wanted to buy more than one unit and they weren’t prepared. We had to work with our client to accommodate them but I don’t think our flat-footedness on this item was apparent to bidders and it did allow us to sell several more units at the auction.

You’ve had listing experience (for individual homes), how much faster do you think the auction process and ensuing post-auction sales process sold these units versus the sales center approach we typically see in Boston?

Brecht Palombo: You folks may be better at answering that question than I am. How long would it take to bring a 44-unit building to market from zero to sold out in 2008? We sold 66% in 30 days, 80% in 90 days, and finished them off in less than 180 days. Have you seen any other new projects sell out in 6 months?

What was the reaction of the broker and agent community to the auction, and how do you think that those constituencies helped or hurt the auction?

Brecht Palombo: The reaction was mixed. I think some agents chose to ignore the project for whatever reason but there were a small number of agents who were very active and sold a number of units . MLS rules and regulations forbid us from entering every auction we conduct in the system but we almost always encourage broker participation unless our client forbids it, even then we’ll push back. We believe that embracing the brokerage community is in the best interest of our sellers. Brokers definitely contributed to our success.

What was one of the biggest lessons learned from the Broadluxe sales process?

Brecht Palombo: When we were first going to bring these units to market there was a lot of internal debate about how to get people there. There are a variety of methods at an auctioneer’s disposal. In the end we decided to go with guaranteed-sold published minimum bids. This meant that if you showed up and bid you were guaranteed a sale unless you were outbid. Our numbers were good for that day only. As I look at the success and failure rates of the various condo auctions over the last year, I think it’s pretty clear the bidding public approves of this message.

Do you foresee further development-level auctions (in Boston) similar to Broadluxe in 2009?

Brecht Palombo: Well we sure hope so… but if you’re asking if I see more lenders and developers embracing the auction process to eliminate inventory in 2009 the answer is a resounding yes.

If you can dig yourself out of the snow drifts after Saturday’s winter storm, or if you park your car in a garage parking space, the Seaport District is hosting two $1 million+ luxury loft open houses that will be sure to impress.

On Sunday, January 11, 2009 from 12:00 PM to 2:00 PM, Unit 401 at 35 Channel Center Street is being held open.  The listing is a stunning loft recently featured in Boston Magazine located in the hot Fort Point Channel neighborhood. Designed by a notable Boston architect and design team, this showcase two-bedroom two-bathroom home was designed with the finest materials and a multitude of custom features including expansive living and dining rooms, generous master bedroom with large dressing area/closet system and spa like bath, open granite/stainless kitchen featuring a large island and abundant storage. Direct access deeded garage parking included.

Unit 401 at Channel Center is listed at $1,190,000 for 1,914 square feet ($622 per square foot) and has monthly HOA fees of $839.

Additionally appealing is Unit 622 at Fort Point Place (21 Wormwood Street), which is being held open during the same time frame on Sunday, January 11, 2009 from 12:00 PM to 2:00 PM. The listing at Fort Point Place is a truly unique contemporary brick and beam corner Penthouse Loft featured in Design Magazine, with over 2,000 square feet of living space. Kitchen & Master bathroom finishes, tile and lighting from Italian design and all imported from Italy. Spiral up to a 270 square foot private roof deck constructed with Special IPE environmentally friendly wood designed by Beth Whittaker. Juliet Balcony in living area, and southeast exposures offer an abundance of natural light within. Single deeded garage parking space included.

Unit 622 at Fort Point Place is listed at $1,199,000 for 2,058 square feet ($583 per square foot) and has monthly HOA fees of $622.

After a relatively successful start out of the gate, DNA Lofts, the latest loft-style development to hit Dorchester, recently made the decision to lower unit prices to maintain momentum and sales velocity heading into 2009.

Prices at the 59-unit DNA Lofts development formerly ranged in price from $245,000 to $599,000, and have since been reduced to $207,000 to $591,000.  On the lower end of this scale are studio units, with excellent light, and on the higher end, expansive penthouse units with their own outdoor space.

The DNA Lofts development, where units include a parking space in the onsite garage or parking lot and a short walk to the Red Line, have been touted as an alternative to South End condos, especially new developments farther south in that neighborhood.

In the Summer of 2007, a hotbed of activity was happening surrounding the (Red Line) Broadway T-Stop in South Boston.  The Macallen Building had recently opened with fanfare as Boston’s first green building adjacent to the existing Court Square Press loft development, work was underway on the Allele, and a boutique development on the corner of A Street and W 4th Street called the Lofts at 36 A promised to offer something unique to its residents. In late 2008, 36 A is approaching sold out status, and residents and potential Buyers are enjoying the building.

36 A goes beyond the no frills exterior and posh interior finishes, and someone who knows this well is Beth Dailey, who has served as the Sales Director for the Lofts at 36 A since preconstruction.  Dailey is a prominent listing agent in South Boston, and speaks very knowledgeably about the 36 A property and the surrounding area.

One of the things about the Lofts at 36 A that residents are most excited about is the the low condo fees, which give you “everything you’d want in a building in the city without the expense of a concierge or gym passed on to unit owners,” says Dailey.  “People are choosing to buy a second parking space [in the building] because the condo fees are so low – they are purchasing a second vehicle with the extra money they save in condo fees.”

Proximity to the Mass Pike and 93, as well as being just 280 steps to the T are amenities that don’t go unnoticed by residents.  36 A truly shines when you turn to the inside of the building and begin to look at some of the finishes with which the developer outfitted the boutique development.  The developer was actually planning to move into the building with his wife, young daughter and pets, however, when his wife became pregnant with their second child, he needed a little more space.  The fact that the developer was going to call the building home is a blessing in disguise to residents, as the building was constructed with personal care.

The building has been built with some of the latest advances in systems, and some of the sleekest finishes in Boston, for instance, the stained and scored concrete floors are by far the most unique and hip floors you will currently find in the city.  The quality of the (high velocity) systems have helped condo Buyers save on heating and cooling bills says Dailey, as “many residents have not even turned on their heat yet this season, sound deadening insulation, and staggered stud 2 x 6 construction between units, and concrete between floors,” all assist in making the most efficient use out of the available square footage

The contemporary loft-style units at 36 A are all south facing, and offer curtain walls of glass.  All condo fees in the building are below $280 per month, and Buyers seem to appreciate the straightforward pricing that is inclusive of at least one parking space in the two-level garage parking (street level and a below grade level accessed via a car lift).  The building is built to be family and pet friendly, and has a bicycle and baby carriage area, and extra storage.

Given the economic downturn that Boston is faced with, 36 A positions itself from a unique value perspective as “a small boutique building with very low condo fees and taxes relative to the other buildings in the neighborhood.  It’s brand new construction which limits the exposure to assessments and having to replace common area elements,” says Dailey.  The ground floor commercial space is uniquely controlled, and deemed a low impact commercial space (i.e. no restaurant or food use), and is currently occupied by a residential real estate brokerage. The common space that does exist in the building is decorated in a contemporary and subtle way, especially the elevator lobby, which is adorned with a commissioned piece of artwork by a resident in the building.

There are currently 6 units for sale at 36 A, ranging in price from $519,000 to $659,000, which includes at least one heated garage parking space, as well as access to a common roofdeck with expansive city views.

When Berkeley Investments Inc., local restaurateur Barbara Lynch, and Mayor Thomas Menino broke ground at the mixed-use FP3 condo development on Friday, April 20, 2007, the project was heralded as the new luxury baseline in the Fort Point Channel.  More than a year and a half later, the development is now a reality, but the 92 residential loft-style condos are not moving off the market.

In July of 2008, a Berkeley employee was quoted in Banker & Tradesman saying that 38 units were Under Agreement poised to close when the certificate of occupancy was issued later in the summer (see Brokers: Fort Point Condo Project Too Pricey for Neighborhood 100 KB PDF), yet, fast forward to today, and a very different reality exists with the certificate of occupancy indeed in place, but only 9 units have sold, and 2 are Under Agreement.

The pertinent condo sales statistics at FP3 include:

• Number of Listings Sold: 9
• Percentage of Building Sold: 9.8%
• Average Sale Price: $610,436
• Median Sale Price: $541,000
• Average Price per Square Foot: $659
• Average Days on Market: 120

The popular restaurateur Barbara Lynch has opened the much hyped Sportello restaurant on the ground floor of FP3, alongside her new lounge, simply called Drink. The presence of Lynch onsite has been one of the cornerstones of marketing for FP3 developers, both for the condo development itself, and the overall neighborhood, but condo sales in the building have not been able to keep pace with the opening of Lynch’s new posh attractions.

Local real estate broker, Elad Bushari of Bushari Group Real Estate says that he is a fan of the area,”the location is great, close to the Financial District, the red line and great restaurants. The top floors are amazing, big windows, outdoor space, and great views.” However, Bushari cites price in accounting for the significant difference in sales velocity between FP3 and more popular condo developments such as 285 Columbus Lofts that are approaching sold out status in a much shorter sales cycle with,”I think that it has a lot to do with the developer’s flexibility on prices, most of the feedback I received from my buyers is that it’s just too expensive; the area is going to be great but it’s not there yet.”

While the price points, and lack of price reductions, may be keeping potential new Buyers at bay, current residents have reason to smile. Berkeley Investments has yet to cut prices to the point where current residents are stuck with negative equity in their units, an unfortunate reality for some Bostonians who buy early at new luxury condo developments. It’s a balancing act to try and buy the specific unit that you desire in a new condo development early in the preconstruction sales cycle, but at the same time, avoid buying in too early so as to avoid (oftentimes inevitable) developer price reductions on future unsold units that will ultimately bring palatable building price points below preconstruction levels.

“I don’t think they need to do much more. Their marketing looks pretty good to me, I don’t know their traffic, but they are noticeable, at least in the brokers community,” states Bushari.

Heading into the winter months, there are currently two units (210, 217) Under Agreement at FP3 Boston, both units at the lower end of the price scale in the building with a studio and a one-bedroom listed at  $349,000 and $449,000 respectively.

the annual Dorchester Open Studios event is being held this weekend at various locations (see the Dorchester Arts Collaborative for more details) throughout the neighborhood.  If the art draws you in, a stop into unit 202 at 950 Dorchester Avenue could also inspire you.  Unit 202 is part of an intimate recent new redevelopment that houses 13 condos, 12 of which are owner occupied.

Currently listed for sale at $399,000, unit 202 offers 1,207 square feet, a true loft feel with exposed brick and beam and polished concrete floors.  The large open living space is splashed with light from the 8 foot windows, which go well with the 13 foot ceilings.  Upgrades in the unit include concrete countertops, custom cabinets, high-end appliances, and a large private deck that spans the entire length of the unit.  Parking, and extra storage, are included.  Condo fees are $184 per month, and include water, sewer, and master insurance.

An open house will take place at this Dorchester loft on Sunday, October 26, 2008 from 12:00 PM to 1:15 PM.  For more information, contact us by using the link at the top of this page.

Situated in the heart of Boston’s Financial District, the Broadluxe loft-style condo development is, after several months, now down to its final two developer units. The final two units, both studios, and essentially the same floor plan, are approximately 540 square feet, have the same finishes that other units in the building contain, including granite countertops, exposed brick and beam, washer / dryer hookup, and extra storage in the basement.

The two units, 4F and 5F, are both listed at $299,000, however, this price comes on the heels of several price reductions in an effort to move the last of the remaining inventory off the books of owner Apex, Inc. (a subsidiary of TD Banknorth).  The developer has appraisals in hand for the units at approximately $340,000, and are being aggressive about closing out the remaining two studio lofts.

• 544 square foot studio – 4F Floorplan
• 539 square foot studio – 5F Floorplan

Condo fees for these units are approximately $320 per month, and include hot water, water, sewer, master insurance, security (including concierge Monday through Friday), elevator, exterior maintenance, snow removal, refuse removal.  For more information, use the contact us link at the top of this page.