A behind-the-scenes look at new real estate in one of America’s oldest cities.
By Geoff Nudelman
December 31, 2018
It’s an increasingly familiar scene: hundreds of young professionals mill about a farm-to-table lunch, a hip workout gear shop, or a SoulCycle spin class.
Across America, this is a common snapshot in newer cities where affluent 20- and 30-somethings are starting fresh in more affordable secondary markets.
But this particular scene isn’t happening somewhere new. It’s happening in one of the oldest cities in America: Boston.
While the traditional neighborhoods of Beacon Hill and Back Bay are still alive and well, the growth of Boston’s luxury offerings are front and center in Seaport–a neighborhood that was literally underwater until the late 1800s and is now thriving as an example of the future of American living.
“It’s truly an iconic location,” says Janice Dumont, CEO of Advisors Living, speaking about the site of new building Pier 4–a dramatic, curved, 106-unit enclave tucked behind the Museum of Contemporary Art on Seaport’s northern side.
Pier 4’s modern architecture (designed by renowned firm SHoP), full-service amenities, and integrated waterfront living are drawing buyers from far and wide to the urban environment. (Some are paying as much as $4,200 per square foot for penthouses.)
“[Based on all on of this], Seaport has created a new destination within the city,” Dumont says.
As much as a skyline dotted with cranes and construction is dizzying in Seaport, the center of traditional Boston luxury still resides in the #5 neighborhood of our Top 10 Priciest Neighborhoods in America: Beacon Hill.
“It’s a real village and a tight-knit community,” says Manuel Davis, senior vice president of Advisors Living and the exclusive listing agent at the Archer Residences, Beacon Hill.
The full-service, seven-story building (half of which was the original Suffolk University Law School) underscores the immense work and effort required to restore and modernize a piece of living history–and how attractive that proposition is to luxury buyers.
What started as 75 residences of varying sizes has been condensed to 61 condos due to buyer requests, many averaging above $5 million. (Davis could not give specific sales figures, but noted that they have been “robust.” The building will be completed towards the end of 2019.) The Archer Residences had to work with several historical commissions to carefully restore the combined building, retaining Beacon Hill’s trademark charm and style along the way.
Coupled with extremely limited inventory in single-family homes, Beacon Hill stands to remain an epicenter of Boston luxury for some time to come.
Just across Boston Common, the Four Seasons Boston Hotel and Residences remains another mark of traditional Boston affluence. Built in 1983, the residential side of the building has long been home to some of the city’s wealthiest people with a location overlooking the park and one of the earliest examples of modern, full-service amenity living in the area. Since its opening, residences have rarely traded on the market and haven’t been available for long.
The success of the original property spurred Four Seasons to build a large new residential/hotel hybrid tower just a mile-and-a-half away at One Dalton.
“It’s in a class all its own,” says Michael Carucci, executive vice president at Gibson Sotheby’s, which is the exclusive listing agent for the 61-floor project.
While he can’t reveal sales numbers, he did say that the building is 75 percent sold with “sales at a record pace compared to other Four Seasons projects around the world, and at price premiums above the Boston market that are higher than most price premiums achieved by other comparable projects in their respective markets.”
“Boston is becoming such a global destination [for the ultra-wealthy]. A lot of us were wondering: What took so long?” he says.
Opening in spring 2019, One Dalton will bring 160 condos perched above the new hotel, which marks a decided shift in the local luxury market. Three separate floors are earmarked as dedicated amenity spaces, with several floors at the top of the building reserved for unfinished penthouses. Pricing will range from $2.5 million to over $40 million.
Carucci noted that luxury buyers across the entire spectrum–not just the younger set–are looking for all-in-one, live/work/play lifestyles, drawing them to buildings in places like Back Bay and Seaport that are close to major commercial centers.
“There’s no longer an appetite for commuting,” he says. “It’s very important to people to not to sit in traffic anymore.”
Perhaps therein lies much of this newfound attraction to Boston: it’s a highly walkable city. End-to-end isn’t much more than an hour at a strolling pace, and many of these newer projects are taking advantage of the old “location, location, location” adage.
Boston’s next major neighborhood renewal, Lovejoy Wharf, takes advantage of its waterfront location. While Related Beal has already opened a 15-story, 157-unit building right next to the relocated Converse HQ (and complete with an Instagrammable restaurant facing the water), that’s just the tip of iceberg.
This largely quiet residential area sits next to TD Garden and a major transit hub, and as it stands could be Boston’s next micro-hotspot.
“The evolution has been really interesting,” says the Codman Company (TCC) managing director Sue Hawkes (TCC works with several residential properties throughout Boston). “It’s been a niche area that was formerly cut off by some of Boston’s man-made boundaries.”
Besides shoes and brunch, the Hub on Causeway is bringing a major mixed-use development–complete with Boston’s largest supermarket–to a site across the street from the sports arena. The planned residential and office components are aimed at attracting tech and advertising workers–the ones that can afford luxury properties and the required amenities of 21st century living. (Verizon has already pre-leased a significant chunk of the building’s available office space.)
However, all of this new inventory coming online may present new challenges for a city that has traditionally had a tight luxury housing market.
“The developers are going to have to deliver a really good product,” Carucci says, “because over the next couple of years there will be fierce competition for buyers. There’s no question about that.”
A recent Institute for Policy Studies report offers a decidedly negative view of both the city’s luxury residential market and the homebuyers who support it. The study’s argument that the luxury buildings are populated by faceless corporate entities and international buyers seeking to park their money ignores a larger and exceptionally positive outcome for the city. (Full disclosure: As the principal of a full-service residential and commercial real estate brokerage firm in the Boston market, I represent many real estate owners and developers.)
First, the burgeoning community of luxury condos in Boston is, in economic terms, a net positive for the city — providing significant tax dollars and job opportunities. Contrary to the study’s one-sided viewpoint, luxury development in Boston provides new residential opportunities for those who are looking to move into the city.
In addition, the report seems to view ownership by international buyers as an inherently nefarious undertaking, calling one tower a “classic wealth storage” property. The study’s authors seem to have a decidedly dim view of international real estate transactions — perhaps based on data from other markets such as New York City and Miami, which have experienced an influx of problematic transactions and slow city reaction.
Boston is on the world stage for many respectable reasons — education, medical, life science, technology, and finance. As such, the Boston real estate market has and always will attract local investors, as well as equity from throughout the United States and around the globe.
I’ve worked with many types of investors and home buyers throughout my more than 20 years of working in Boston real estate. My experience is that the majority of the international buyers in Boston are connected to Boston in a variety of positive ways. They buy a home here because their child is attending a Boston university, or they want to be near our world-class medical care, or they are relocating to here for a well-paying job in the tech, medical, life science, or financial services fields.
One of the study’s primary negative data points is that 64 percent of luxury condo owners in the sample do not claim their residential exemption, which the study calls “a clear indication that the condo owners are not using their units as their primary residence.” However, this point is superfluous. The requirements to obtain the exemption are time consuming and unwieldy for an annual exemption that amounts to only a few hundred dollars for most homeowners. As such, many people who purchase luxury units will not spend the time on something with such a small benefit.
Instead of depending on subsidies and rent control like other cities, Boston’s affordable housing policies create a virtuous cycle wherein the more projects that are approved, the more affordable units are delivered — thereby creating a robust workforce with the buying power to fill them. Moreover, every new residential development increases Boston’s property tax base – which helps the city become socioeconomically appealing to all – thereby attracting more and more residents.
While decrying projects like Millennium Tower in Downtown Crossing, the study ignores the fact that annual real estate taxes generated from Millennium Tower singlehandedly exceeds $12.6 million — equal to paying the annual salaries for 303 teachers or 168 police or 136 firefighters. Yet the number of police and fire calls to this building was four and the number of children using public schools is de minimis.
Meet the Archer Residences, 67 very fancy units coming to Beacon Hill in the near future. The Archer’s penthouse, which is currently the most expensive home for sale in the city at a whopping $18 million, is poised to be architectural marvel when it’s completed. Both levels of the home are connected by a floating wood-and-steel staircase enclosed by glass—and the shiny glass accents don’t stop there. Floor-to-ceiling sliding glass doors in the main living area open directly to a rooftop terrace, where there’s a Jacuzzi and an infinity-edge pool.
Advisors Living is proud to announce the exclusive sales and marketing of The Archer Residences in Beacon Hill. The Archer Residences, a boutique collection of beautifully designed condominium homes, offers individualized details and a full-service concierge experience in Beacon Hill, one of Boston’s most desirable neighborhoods. From the magnificent roof terrace to the state-of-the-art fitness and wellness center, valet service, and exclusive indoor parking, The Archer Residences are designed to make life easier.
From The Archer Residences, many of Boston’s greatest attractions are just a short walk away. Feeling the team spirit? Enjoy the Celtics and the Bruins, two of America’s most successful and historic teams, at TD Garden. Or maybe you just want to take a relaxing stroll around the historic neighborhood? The Boston Public Garden, built in 1837, is a beautiful public park that offers boat rides around its swan-filled lagoon. Louisburg Square, a quiet, historic green near The Archer Residences, was once home to many famous 19th century figures, including architect Charles Bulfinch, painter John Singleton Copley, and author Louisa May Alcott.
The Archer Residences features 67 unique residences ranging in size from one to four bedrooms. Each residence has been thoughtfully designed, blending the historic character of Beacon Hill with an elegant hand-selection of materials and finishes.
Click here to schedule an appointment or call us today at 888-749-4805 to visit our sales center today at 20 Ashburton Place. We look forward to showing you what makes The Archer Residences the most exciting residential new construction project in Boston.
The longtime home of legendary Boston seafood restaurant Anthony’s Pier 4 is rapidly transforming into a luxury condominium complex, and the site’s developer just landed a lease with farm-to-table restaurateur Kristin Canty.
Interest is strong for the Pier 4 condos, said Janice Dumont, CEO of AdvisorsLiving. The firm, which is the residential division of Boston Realty Advisors, is the exclusive sales and marketing agent of the nine-story, 106-unit complex.
Pier 4, a nine story, 106-unit luxury condominium building, will open in late 2018 at the former Anthony’s Pier 4 site in Boston. Tishman Speyer is developing the complex, which was designed by SHoP Architects in collaboration with Boston-based CBT.
“Given the nostalgia of the site, and the fact that so many people have had wedding receptions, bar mitzvahs, confirmations, at the site, it’s been very exciting,” Dumont said in an interview with the Business Journal.
Two-bedroom units at Pier 4 will start at $2 million-plus. Each home has its own private outdoor space and water views, and penthouse units will feature private roof decks. Amenities include an outdoor terrace, an outdoor seating and dining area with a fire pit, virtual golf and 24-hour concierge services from First Service Residential.
The nationwide trend of real estate agencies mergers and acquisitions came to Boston this month with Douglas Elliman’s announced purchase of local Otis & Ahearn Real Estate. Smaller firms are feeling the pinch from rising costs and market forces, and more consolidations are likely.
The increased attention from out-of-town players has been a major topic of conversation around the watercooler at Boston Realty Advisors, said Jason Weissman, founder and senior partner – and he couldn’t be happier about it.
“It shows the strength of the market,” he said. “You have to look at Boston. If we end up going into a recession, Boston is going to have the softest landing of any city in the country because of the diversity of strong industries we have here. This city is going to outpace other cities.”
Boston Realty Advisors in the largest independent brokerage in the city as measured by gross commission income, Weissman said, and he has also been approached by other companies looking to acquire it. He’s not interested. In fact, he’s actively looking for companies to acquire.
“There’s no exit plan,” he said. “We’re very focused on serving our clients. They say if you love what you do, you’ll never work a day in your life and I love the business. I love competing and I love competing successfully. It’s extremely tough for smaller independents to compete. We’ve built the infrastructure to compete and win.”
Think Globally, Sell Locally
Gibson Sothebys is also in acquisition mode. Co-owner and chairman Larry Rideout said his company is not looking to be acquired, but he does see more acquisitions in Boston’s future.
“Big, New York companies are starting to see that Boston is on the map,” he said. “We’re also in acquisition mode. Now is a good time to consolidate in the Boston market. We’re looking for a cultural fit. Of course, the numbers have to work out and it has to be a win-win.”
Rideout said the white-hot Greater Boston real estate market can’t burn forever, but he thinks the signs point toward a few more good years. Companies that make smart acquisitions now will cash in on those good years.
“Permits are down, but they were up for a long time and things have to take a breath,” Rideout said. “Sales slowed a little this summer, but they’re going to come back. You have to look long term. Mortgage interest rates are low, money is cheap and Wall Street is doing OK.”
As Boston has become a more international city, Rideout said having the money and the network to market globally has become vital. Small, local companies just don’t have the same reach, making it harder for them to compete.
“You have to start thinking globally,” he said. “I have Sothebys, with an amazing international reach, and I still joined ‘Who’s Who in Luxury Real Estate.’ You have to use everything you can.”
Boutique Firms Can Compete With Behemoths
There’s still plenty of business for small, locally owned real estate agencies with excellent customer service, said Carmela Laurella, president of CL Properties. Laurella isn’t concerned with acquisition talk; she’s focused on remaining small and providing “excellent service and exceptional results.”
“Our firm is eight years old and we’re having one of our best years ever,” she said. “We operate like an investment banking firm. We choose to stay small and boutique. Most of our business comes from the Internet and repeat business. We have no problem getting listings and making sales.”
Deep pockets and a global reach are not as important as growing a local base of satisfied customers, she said. Big firms like Douglas Elliman and Berkshire Hathaway, who are both in acquisition mode, don’t bring that to the table.
“I wish them both well, but I do think they’ll have a hard time catching up,” she said. “This business is about people and relationships. I used to work for Coldwell Banker and Otis & Ahearn and when I left, my clients followed me, the agent, not the brand. We’re niche players. I have people who will walk over the Charlestown bridge to find me because they want me to sell their homes.”
Douglas Elliman did not respond to requests for comment.
Change Creates Opportunity
The trend of smaller companies being consumed by larger ones will continue in Boston, said Jeff Heighton, regional vice president and Boston-area general manager at Compass Real Estate. The Greater Boston economy is growing quickly and big companies are looking to capitalize on that.
“Boston is a major metropolitan area with a lot of investments from across the country and globe,” Heighton said. “If you’re a large company, you need to make sure you’re in the major markets across the country, like Boston. For companies that aren’t here, they’re thinking about it.”
Growing a business by acquisition is far more complex than simply buying an agency and changing the flag, he said.
“I’d say we’ll see more acquisitions in the near future at all levels as agents ask their firm, ‘What are you doing to grow my business?” Heighton said. “As that question can’t be answered, they’re going to look for companies that can. That’s part of what’s driving the consolidations.
What does The Federal Reserve Increase on Wednesday, December 14 mean for you?
On Wednesday, December 14th, the Federal Reserve raised the federal funds rate by 25 basis points from 0.5% to 0.75%. The confidence in the U.S. economy was caused by a strengthening labor market, a low rate of unemployment only expected to go further down in 2017, and inflation moving rapidly toward targeted levels. This is only the second time in the past decade that this has happened. It is anticipated by the Fed that there will be three rate hikes in 2017 instead of two, a change that reflects their increased anticipation of a strong U.S. market.
According to Fed Chairman Janet Yellen, “Our decision to raise rates should certainly be understood as a reflection of the confidence we have in the progress the economy has made and that it is expected to make.”
So what does this mean for potential home-buyers in Massachusetts, or really throughout the U.S.?
Now is the time to buy. Mortgage interest rates are still very low, but with this announcement and other increases predicted for 2017, your buying power as a consumer of real estate is only going to go down as the Mortgage rate goes up.
For example, the cost to finance $500,000 (before this announcement, 30-year fixed, 4.35%) was approximately $2,486 per month principle and interest. Since the rate increase on Wed. the average % has moved to 4.45% giving a buyer a cost of approximately $2,519 per month principle and interest. An increase of approximately $33 per month or $396 per year. With three more interest rate increases expected in 2017, one can expect these small bumps in the mortgages rates to add up to a bigger monthly cost number. If you can, buying now make “cents”.
Advisors Living is pleased to introduce our newest exclusive listing. This luxury new construction contemporary single family home is located at 175 K Street in South Boston. Designed by the local and talented architectural firm Embarc Studio, this home was built to offer a multi-level contemporary and luxurious lifestyle while maintaining the much sought after and often over looked traditional layout. The transitional finishes embody a pronounced elegance and sophisticated design, culminated by an exceptional use of material and craftsmanship.
THE SUBSTANTIAL FOUR BEDROOM HOME is remarkable in nature with its open concept and impeccable custom design. The abundant oversized Marvin integrity windows and the 10’ ceiling heights throughout offer a natural rhythm shared with the exterior, a design that prioritizes quality of light and use of space.
THE PROFESSIONAL CHEF’S KITCHEN features Jenn-Air stainless steel appliances. The custom painted light grey, beaded edged maple cabinets are accented by the Quartz Artic white honed counters which present clean and modern lines.
The build and layout exceeds by including a wonderful living room accented by a centered modern gas fireplace and a well-positioned separate dining area that fills with natural light via exceptional window placement.