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The Swami Doesn't Like To Gloat, But...

The Swami Doesn’t Like To Gloat, But…

Fresh from picking the winning number for the recent Mega Millions drawing (The Swami isn’t allowed to play for obvious reasons), The Swami is sitting back and reflecting on yet another prescient observation, one first noted by Boston’s most famous seer of all things futuristic.

Recall The Swami’s notable prediction for 2012 entitled, The Condominium Market Returns:

Two substantial condominium developments are moving towards reality following years of the residential landscape being dominated by rental developments.  One was recently announced as an addition to the Boston waterfront.  The other, Charing Cross, a 55 unit condominium building on Commonwealth Avenue in Brighton, is moving through the City’s Article 80 process and is scheduled to break ground this year.  The world of residential development finds itself normalizing in 2012 as, among other things, renters begin to realize that they can buy for the same money that they’re spending or about to spend on rent.

Well it’s happening right before our eyes.  In fact, no less a light in the world of Boston real estate than Michael DiMella of Charlesgate Realty Group, during a recent live interview about the Boston rental market on The Morning Show on NECN, stated to host Steve Aveson that, “High rents are causing many people rethink the Rent vs. Buy debate in Boston.”  Michael knows from whence he speaks since he and his partner, PT “The Boston Haggler” Vineburgh, recently presented a condominium building on the Boston/Brookline line to the market and sold it out over the weekend.  Talk about pent-up demand!

You need more evidence?  In a recent article in the Boston Business Journal titled “Is the Hub facing a luxury apartment glut?” (I wonder where they possibly could have come up with that title?), it was noted that:

Residential developers are changing the city’s real estate landscape and will make thousands of über-luxury apartments available in the next three years.

But one downtown broker says it’s unclear whether these units ­— most priced from $3,000 for a 350-square-foot studio to more than $8,000 for a two-bedroom penthouse — will find renters.

“We’ve never had this amount of new pipeline, so we just don’t know the depth of the rental market or how much demand they’ll be,” said Kevin Ahearn, president of Otis & Ahearn, whose company leased 86 units last year at Boston Properties’ Lofts at Atlantic Wharf on the Rose Fitzgerald Kennedy Greenway priced from $2,500 to $7,500. “Boston is a small city and we’ve always been more of a for sale market, rather than a rental market.”

Still not convinced? Banker & Tradesman, in a recap of the recent NAIOP multi-family conference, headlined an article CBRE Partner: 2015 May Be Too Late For Some Seaport Apartments.”  The text of the article went on to say:

Some apartment projects slated for delivery in 2015 could be too late to the dance if financing dries up or demand is satiated by the hordes of new rental slated for earlier delivery or already under construction, according to an industry expert.  “Projects like Pier 4 and Watermark Seaport on the South Boston waterfront could be faced with a changed financing climate if interest rates rise or demand for apartments drops”, said Simon Butler, partner with CB Richard Ellis.

All of the above appeared after predictions made by The Swami (six months ago!), and this is just the tip of the iceberg.  Developers in Boston, Cambridge, Somerville and points north, west and south of Boston are now putting their collective toes in the water to determine whether the time is right to be in on the beginning of the coming condominium wave instead of riding it down some time in the future.

One of the first of these, now familiar to the readers of this blog, is Charing Cross, a 55 unit condominium development to be constructed at 1501 Commonwealth Avenue in Brighton.  Developed by the Brighton Partnership for Community Reinvestment, a joint venture of Diamond Sinacori and Hart Development Associates, Charing Cross will be presented to the BRA Board for the purpose of completing the City’s Article 80 process.  Next month, Charing Cross will appear before the Zoning Board of Appeals and, if successful, will be only a Building Permit away from beginning construction later this year.

Charing Cross condo development in Brighton, MA

Charing Cross in Brighton, MA (courtesy of Tise Design Associates)

 

Further, this same development team is about to put 1650 Commonwealth Avenue in Brighton under Agreement for the purpose of creating another 40+ condominium units and, as always, a palette of Community Benefits.  Charing Cross will create the market and 1650 (yet to be named) will continue to cater to it.  It is anticipated that the recently launched multifamily marketing firm, IGNITION Residential, will market both projects.

Yes, “We Believe In Brighton,” but we also believe in the emergence of a vibrant condominium market over the coming years.

So does The Swami…

 

If you want to know what’s going to happen in the Boston real estate market months or years from now, we suggest you Talk to The Swami.

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About Merrill Diamond

Merrill H. Diamond is a trained architect and a founding principal of IGNITION Residential, an interdisciplinary multi-family marketing firm. He is also a founding partner of Diamond/Sinacori, a Boston-based real estate development company founded in 1978. Mr. Diamond has been the recipient of numerous local and national awards for both development and marketing. He has served as both a gubernatorial appointee to the Massachusetts Historical Commission and to the Senate Special Commission on Historic Preservation. In addition, Mr. Diamond has been named “Entrepreneur of the Year” by Arthur Young / “Venture Magazine;” “Merchant Builder of the Year” by the National Association of Homebuilders (NAHB), and one of “America’s Most Valuable People” by “USA Today".

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