Towering expectations for high-end condos
The first major condo project to go up in downtown Boston since the real estate crash is testing the market.
Millennium Partners, the New York‐based developer behind a mixed‐use project to fill the Filene’s crater in Downtown Crossing, is aggressively marketing Millennium Place, a 15‐story glass‐and‐steel condo complex that was once the Hayward Place parking lot on Washington Street. The 256‐unit luxury project will offer one‐, two‐, and three‐bedroom units from 775 to 2,360 square feet, priced from $550,000 to $3.5 million.
Millennium Place will be the Hub’s newest luxury condo tower since three luxury projects — 45 Province in Downtown Crossing, the W in the Theatre District and the Back Bay’s Clarendon — opened as downtown’s high‐end condo market started to tank more than three years ago. Those three high‐profile projects have yet to sell out.
The Millennium project, however, seems poised to enjoy better timing. There’s a shortage of inventory in the downtown, and brokers say the mix of amenities and pricing already has attracted buyers almost a year before the project is scheduled to open.
Anthony Pangaro, principal of Millennium Partners/Boston, did not return calls seeking a comment on the project. But Millennium’s marketing staff recently brought brokers through the property and conducted tours of a model unit on Tremont Street, telling agents that there’s strong interest from buyers.
Michael Doherty, a broker with Citylife Real Estate, said he was told Millennium secured reservations on 50 units, and 10 of those have turned into signed purchase and sale agreements. “They’ve got a very sophisticated showroom where you can see model floor plans,” Doherty said. “They’ve done an amazing job of putting it all together.”
David Paez, a principal at Boston International Real Estate, said the combination of a high‐tech computer model of the future units and thorough marketing — which he says has been lacking at some of the city’s other luxury projects — is making Millennium Place a hit with buyers and brokers. “It was like trial and error in the city of Boston with 45 Province, the W and the Clarendon, and Millennium finally got it right,” Paez said. “They are headed in the right direction on how to market a property in Boston at the right time with the right prices. It’s a project that can’t fail.”
Such unbridled enthusiasm was used to describe 45 Province, the W on Stuart Street and the Clarendon not too long ago.
But the sales numbers tell a different story. Of the 145 units at 45 Province, only 81 have sold, according to the Suffolk Registry of Deeds. A 994‐square‐foot, one‐bedroom unit with a parking space recently sold for $775,000 after being listed at $799,000 in March 2011, according to the MLS Property Information Network. At the W, 86 of 123 units have sold, while the Clarendon still has five units listed on MLS priced from $1.5 million to $7.1 million in the 32‐story tower.
Agents say they could sell more condos if there were more units on the market right now. At the end of September, there were just 375 condos in downtown Boston for sale, down from 778 for the same month last year, according to the Listing Information Network. Still, in the third quarter, 1,043 condos sold in a dozen downtown Boston neighborhoods, up 26 percent from the 826 sold in the same period last year. The median sales price for condos rose 6.1 percent to $486,000, up from $457,750 a year ago.
Kevin Ahearn, president of Otis & Ahearn Real Estate, said Millennium Place fills a void in a city that lacks adequate inventory. He said excluding the three unsold buildings, 14 of the city’s luxury properties have sold out, with just three dozen units available for sale in places such as One Charles, the Mandarin Oriental and the Ritz Millennium. In contrast, he said, in June 2009 there were 91 units for sale in those buildings.
“Inventory is dropping like a brick and we’re at the lowest levels in this group of buildings in many years,” Ahearn said. “There’s no new development in the pipeline and here comes Millennium, which offers lots of amenities in an area that’s becoming the hot place. It’s not Marlborough Street. It’s not waterfront. But still people like that edge. They love that it’s the cool place to be.”
The other factor in Millennium’s favor, Ahearn said, is that they are promising an October move‐in date and they have a deal with Wells Fargo & Co. to lock in a low interest rate that will be good at next year’s closing.
Paez said he has a client, an international student attending Boston College, who is ready to buy a one‐ bedroom unit at Millennium Place for $600,000. “It may not be the most beautiful or safest neighborhood in the city,” Paez said. “But my client is betting on the area’s future.”