SOBO - (South of Boylston Street)
SOBO - (South of Boylston Street)
In this series we profile luxury properties located south of Boylston Street in Boston’s Back Bay.
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SOBO - (South of Boylston Street)
250 Boylston, aka “Le Jardin” - How the Kennedy family saved this landmark building.
We’re not big fans of the section of Boston’s Back Bay that sits to the south of Boylston Street – what we refer to as “SOBO.” Our main issue with SOBO properties relates to their high fee structure. These newer properties are all staffed, offering either full or limited service – either way they’re very expensive.
At the risk of painting with a broad brush, we’re also not crazy about SOBO as a general location. It’s nice to be reasonably close to the high-end retail and dining options on Newbury Street, but these newish developments are in non-traditional, off the beaten path locations. For the most part, the locations of these buildings have nuanced flaws that we find unappealing.
While SOBO is technically in the Back Bay and you’ll get a Back Bay parking sticker from the parking clerk at City Hall, it doesn’t have the charm that you find in the traditional Back Bay (north of Boylston Street). In fact, there’s absolutely nothing charming about these buildings.
The primary audience for these developments is empty nesters, most of whom also have summer or winter homes. It’s a transient crowd – the pied-a-terre set. You likely may never meet your neighbors, which isn’t necessarily a bad thing, and you’ll probably never see kids out front with their lunchboxes waiting for the school bus.
The stretch of SOBO between Arlington Street and Charles Street along the Public Garden is an exception to our thinking. Sitting at the crossroads of the Back Bay and Beacon Hill directly across from the Public Garden, this a very attractive location.
250 Boylston Street abuts the Public Garden and we consider it a rose among the SOBO thorns. The building, which was successfully converted from office to residential, has many of the attributes that we look for in a blue-chip property.
250 Boylston - History
Prior to a major redevelopment initiative in the 1980s, this two-block stretch of Boylston Street consisted of a hodgepodge of seedy buildings and empty lots – or as urban planners say, urban blight. The redevelopment called for all the buildings to be torn down to make way for the Four Seasons and the Heritage.
The owners of 250 Boylston, which sits smack dab in the middle of the targeted redevelopment, had no interest in selling their property. In real estate parlance, this is known as a “holdout.” Holdouts often have a negative impact on redevelopment efforts. That’s not the case here; we think that 250 Boylston breaks up the monotony of the red brick of its oversized neighbors and gives the area character.
How did 250 Boylston escape the wrecking ball? This was the headquarters of the real estate firm R.M. Bradley, and the Bradley Real Estate Trust (one of the first publicly traded REITs). R.M. Bradley had very close ties to the Kennedy family. Joseph Hakim, president and CEO of New York based Joseph P. Kennedy Enterprises, was also the trustee of the “250 Trust” which held title to the property. With a little political razzle-dazzle, R.M. Bradley got their way and the building survived.
The property remained an office building until 2001 when a new owner brought in famed architect Patrick Ahearn to transform the turn of the century industrial style property into nine luxury condominium units with an underground parking garage. The property was branded “Le Jardin” (the garden).
Originally built in 1900, when indoor electric lighting was still evolving, oversized windows were needed to help illuminate workspace. Today, despite the 20 oversized windows on each floor, the building is dwarfed by its newer neighbors and the shadows limit the amount of natural light. Making matters worse for sunlight worshipers, the orientation toward the Public Garden faces due north.
Unit 3A - Well Bought or Well Sold?
After being on and off the market for three years, unit 3A at 250 Boylston Street finally changed hands recently. The sale price for this 2,896 square foot, 4-bedroom unit came in at $7.8 million ($2,693/sf).
Being a SOBO property, 250 doesn’t disappoint when it comes to high condominium fees. The monthly fee will run you $7,600 a month. That equates to $2.62/sf/month, which is marginally higher than you would pay at the neighboring full service Four Seasons, or the Mandarin Oriental just a few blocks away.
Smaller staffed boutique buildings lack the economies of scale that you find in larger full-service buildings. You end up paying a premium fee and get fewer amenities. We consider boutique buildings to be “limited-full service” properties.
With respect to valuation, the unit is pretty much as it sat nearly 25 years ago. While we could do without the decorative columns in the living room, it doesn’t feel overly outdated. We think smart updating can be done without breaking the bank, but it’s still not going to be cheap.
At one point in the marketing saga, the seller lowered the asking price to a more reasonable $7.2 million and still had no takers. The unit was subsequently re-listed for $7.8 million – in the face of what was a flat market at best. Raising the price is rarely a successful strategy, but it worked here.
This is one of those situations where we wonder if the buyer even attempted to negotiate. Did the buyer’s agent tell their client that the seller was previously willing to accept $7.2 million? By our way of thinking, the negotiation should have started at $7.2 million.
The buyer got a good unit in a great building, but they paid too much. We see fair market value closer to $7.0 million, we’re calling it – Well Sold.
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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.