Condominium Fees – Are You Getting Your Money’s Worth?
Condominium Fees – Are You Getting Your Money’s Worth?
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Condominium Fees – Are You Getting Your Money’s Worth?
“An employee hanging around in the lobby accepting Amazon packages and parking your car doesn’t make it a full service building.”
Property Spotlight – On the Market
16 Exeter Street, unit 1 – Is It Us, or Is This Unit Always for Sale? – Offered at $5.45 Million
Well Bought/Well Sold
25-27 Commonwealth Ave., unit 27 – Bellwether Property Trades Off Market – Well Bought
274 Beacon Street, unit 7R – Nice Co-Op, Reasonable Valuation – Well Bought
Condominium Fees – Are You Getting Your Money’s Worth?
Condominium fees are a fact of life in the downtown market. Like everything else, you get what you pay for – or do you?
The best way to get an apples to apples comparison of fees is to divide the monthly fee by the unit’s square footage, e.g., a 1,000 square foot unit with a monthly fee of $500 would be .50 cents/square foot a month. This example is what you’d expect in a no bells and whistles non-elevator Back Bay or Beacon Hill condominium.
Things get meaningfully more expensive and complex when you move into the higher end of the market. Generally speaking, the more amenities, the higher the fees. But other factors can have a major impact on fees. A property with a unionized staff will likely be more expensive. A two tier condominium structure (known as condominiums within condominiums) can also be more expensive and less transparent.
We’ve highlighted fees from current MLS listings, contrasting what we consider to be true full “hotel service” buildings, and smaller, boutique properties that offer limited services. We’re using the MLS data entered by the listing sales agent which may not be accurate.
In our comparison, the value is clearly in the more established full service properties like the Ritz Towers and the original Four Seasons. These buildings also have the benefit of longer operating histories and they should have a good handle on long term capital requirements.
We’d put boutique “staffed” properties, like 100 Beacon, at the other end of the value spectrum. They just don’t have the scale to compete with larger properties. An employee hanging around in the lobby accepting Amazon packages and parking your car doesn’t make it a full service building.
There are a lot of benefits to living in a true full service building - the key is to actually live there. If you’re only going to use the property a few months a year, you end up paying a lot of money for services that you don’t use.
Property Spotlight
Batterymarch Group is focused on buyer representation, so the highlighted listings are not ours. These are our opinions, so take them with a grain of salt. We’re happy to set up showings of these properties, offer our valuation analysis, and assist with preliminary renovation budgets when needed.
16 Exeter Street, unit 1 – On and Off the Market For Over 2,000 days! – Offered at $5.45 Million
Unit 1 at 16 Exeter Street, a 3,882 square foot 4 bedroom duplex, is currently offered at $5.45 million ($1,404/sf). The property last sold for $5.1 million in October of last year and reappeared on the market last January, just three months later.
At 3,882 square feet, the unit is spacious with well proportioned rooms. Being on the corner of Exeter and Marlborough Streets, you have the added benefit of exposures on two sides. The unit underwent a substantial renovation in the last 10 years and we’d say that the finishes are reasonably good.
The listing states “Included in this sale is a nearby garage monthly parking space.” This is realtor speak for - the unit doesn’t include deeded parking. It’s anyone’s guess what “nearby” means, just know that you don’t get parking in the deal.
There’s a 400 square foot two story entry foyer in the center of the unit. While oversized foyers lend themselves to a feeling of spaciousness, we’re in the camp that sees them as a poor use of valuable space. We’d also highlight the unit has a high-velocity HVAC system which we see as far less desirable than a traditional system.
Our other concern relates to the lack of an elevator – it’s a second floor walk up. This may not be a problem for some people, but it can be a deal killer for anyone looking to age in place.
If you’re in the market for a 4 bedroom unit this should definitely be on your list. We would note that since 2002 the unit has been on and off the market for over 2,000 days (that’s nearly five and a half years) and it’s only sold twice. We’d be very price sensitive on this one.
Well Bought/Well Sold
25-27 Commonwealth Ave., unit 27 – Best Curb Appeal in the City – Off Market Deal – Well Bought
Unit 27 at 25-27 Commonwealth Avenue, a 4,407 square foot 4 bedroom duplex changed hands in an off market deal for $12 million ($2,723/sf). We normally don’t comment on off market transactions, but we’re making an exception here because this is one of the most admired properties on Commonwealth Avenue.
The houses at 25 and 27 Commonwealth were combined in the 1930s and subsequently gifted to Mass General Hospital in the early 1940s. Mass General sold the property in 1997 to real estate developers who converted it into four condominium units.
What makes this property special is the undeveloped landscaped side parcel, one of the few undeveloped lots on Commonwealth Ave. The maintenance of the garden is controlled by a conservation restriction that is overseen by the Friends of the Public Garden. That restriction provides that the garden will remain visible to the general public in perpetuity.
The manicured garden makes this one of the nicest street corners in the entire city. But make no mistake, these developers were pretty savvy and prior to entering into the conservation agreement, they installed a nine car parking garage below the garden.
As for valuation, it appears that the new owner currently owns another larger unit in the building which was bought in 2017 for $17.2 million ($2,276/sf). If the units were combined, it would be just shy of 12,000 square feet, probably the biggest condominium in the Back Bay. Either way, we figure that the average cost per square foot on the two units is $2,441, not bad for a true trophy property. We’re calling it – Well Bought.
274 Beacon Street, unit 7R – Nice Co-Op, Reasonable Valuation – Well Bought
Cooperative apartment 7R, a 1,890 square foot river facing 2 bedroom changed hands last week for $3.249 million ($1,719/sf). The unit, which recently underwent a comprehensive renovation, comes with one parking space and additional storage in the basement.
We highlighted the unit early in the marketing, so we won’t rehash all the details here, except to say that it’s a very nice traditional Back Bay Co-Op unit in a great building. What we will highlight is that another unit at 274 Beacon is still for sale, unit 6F is offered at $2.2 million ($1,164/sf).
There’s no question that 6F is in need of a renovation and that’s reflected in the offering price. The unit has been on and off the market for roughly 480 days, so it’s fair to say that seller fatigue is probably in full swing. Assuming that the global economy doesn’t completely implode, a deal close to $1,000/sf would represent great value to anyone willing to take on a project.
The sale price for unit 7R was fair for both parties. We love the building, so we’re giving the advantage to the buyer, it was – Well Bought.
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About Batterymarch Group LLC – Batterymarch Group is an independent full service real estate brokerage and advisory firm focused on the downtown Boston high-end residential market. We represent both sellers and buyers with a sharp focus on valuation. We also offer sub-advisory and owner’s representation services to financial institutions, family offices, and trustees.
About Andrew Haigney – A 25 year Wall Street veteran, Andrew held senior positions at leading global investment banking institutions where he routinely valued and negotiated complex securities transactions on behalf of institutional clients. Andrew has been an outspoken advocate of a universal fiduciary standard. In founding Batterymarch Group, Andrew brings that same discipline and passion to real estate brokerage.