Real Estate Marketing – Fact vs Fiction, Buyer Beware
Real Estate Marketing – Fact vs Fiction, Buyer Beware
Batterymarch Group LLC is a full service independent real estate brokerage firm specializing in the downtown Boston market. More about our services here.
“The Batterymarch Insider” is a brief snapshot of our current market thinking. As always, our “terms of use” apply. We encourage you to subscribe.
In this issue:
Real Estate Marketing – Fact vs Fiction, Buyer Beware
New and Noteworthy – Taking a Loss In the Back Bay
250 Beacon St, unit 17/19 – A Fair Deal, But Needs Work – Well Bought
212 Commonwealth Ave., unit 2 – An Oversized 3 Bedroom Triplex – Well Sold
What’s Catching Our Eye
Boston Real Estate Marketing – Fact vs Fiction, Buyer Beware
If you’ve ever wound up on a real estate mailing list, you’ve likely been inundated with market updates, generally highlighting how fantastic the market is and always painting a rosy picture. It’s the strategy of the brokers to have their market cheerleaders (a.k.a. their sales agents) pumping out an endless stream of dribble. Consumers need to be aware that these firms don’t have compliance departments reviewing this material and the data is often manipulated.
We get loads of these reports and they often leave us scratching our heads. We’re fastidious about tracking the market and it’s clear to us that a lot of this “market data” is just made up. Not too long ago we received a report from a major firm stating that during the trailing 12 months, the average condominium sale price on Beacon Hill was $2.019 million.
It didn’t seem right to us so we did some fact checking using the same data source for the same time period in question. As it turns out, the average condominium sale price was actually $1.659 million. It’s anyone’s guess where the $2.019 million price came from, but it did neatly fit their “market strength” narrative.
We come from the investment business, where if you churn out fictitious research or manipulate market data, you’ll be lucky only to get banned from the industry for life. Aside from issues involving fair housing, real estate sales and marketing is very lightly regulated. When you lay over the fact that Massachusetts is a buyer beware state, consumers really are fending for themselves. At Batterymarch Group, we adhere to a strict fiduciary commitment (which can be read here).
New and Noteworthy
286 Marlborough Street, unit 1 – Taking a Loss in the Back Bay
286 Marlborough Street, unit 1, with an asking price of $2.95 million ($1,374/sf), has an accepted offer after just five days on the market. We know this unit fairly well as we had a client look at it back in 2017 when it traded for $2.875 million. It’s a 2,146 square foot three bedroom lower level triplex with good outdoor space and parking in a prime Back Bay location.
We’re not surprised that they got a quick offer as it’s a very nice, recently renovated unit. It’s noteworthy that, assuming they got a full price offer, after fees the seller is taking a small loss after almost four years of ownership - that’s the reality of our current market. We’ll keep you posted with the final sale price.
776 Boylston St, unit PH2E – Asking $24.999 Million, Gets a Contract
Unit PH2E at the Mandarin Oriental, a 6,829 square foot 4 bedroom unit with an asking price of $24.999 million ($3,660/sf), has a contract. This unit last traded back in 2011 for $13.2 million when it was marketed as an unfinished one room shell.
The unit was put up for sale back in 2019 for $28.0 million and didn’t find a buyer. A new broker and a $3 million price cut this spring did the trick to get a deal going. Rest assured that the Mandarin wack-a-mole routine continues. No sooner did this unit go under contract, then units 7A, B, and G were offered as a package. If anyone is interested in combining these three abutting units at the Mandarin, the asking price is $7.5 million ($1,764/sf).
Well Bought/Well Sold
250 Beacon Street unit 17 & 19 – The Curse of Combined Units – Well Bought
Unit 17/19, a 4,150 square foot, 6 bedrooms water side duplex with two deeded parking spaces at 250 Beacon sold last week for $5.15 million ($1,240/sf). This marketing effort started back in 2019 with a lofty price of $6.9 million. Seven price cuts and three agents later, they finally got this deal done.
Built in 1926, 250 Beacon is one of the few true New York style pre-war buildings in the Back Bay. This 10 story, mid block, 21 unit building has the added benefit of a live-in superintendent. One knock on the building relates to the original layout which included two tiny maids rooms in each unit. Many of the units in the building retain these rooms (including unit 17/19).
This duplex resulted from the combination of two units by adding a stairway. Properly combining units is complex as it involves redefining the space, and that usually entails moving walls which is very expensive. More often than not, when people combine units they simply cut an opening in a wall or add a stair case, as they did here. The end result is an awkward floor plan.
At $1,240/sf, the valuation isn’t completely unreasonable. However, renovation costs could be substantial if someone properly reworks the space. We think the play here is to separate the units and sell one off and live in the other; under that scenario we’d say that the units were – Well Bought.
212 Commonwealth, unit 2 – 794 Days on Market – Well Sold
It took 794 days, but unit 2 at 212 Commonwealth Avenue has a new owner. The final sale price for this 4,061 square foot, three bedroom triplex, with two car garage parking came in at $7.0 million ($1,723/sf), 21% below the original asking price of $8.9 million.
212 Commonwealth was converted from an 8 unit apartment building into two condominium units in 2018. It has everything you’d expect to find in a spec built condominium conversion, including the obligatory red control knobs on the stove. If you’ve been inside one of these, you’ve been in them all. Probably the nicest feature is the well done roof deck.
So why did it take 794 days? The demographic target market for these units is the empty nester. There is a reasonable chance that a 4,000+ square foot condominium is larger than the suburban home that they are moving out of, so it’s not much of a “down size.” Being on the south side of Commonwealth doesn’t help matters either as it backs up to a busy rear alley.
On the surface, $1,723/square foot is a fair price, particularly when you factor two parking spaces into the mix. But an oversized triplex? We smell liquidity issues down the road, we’re calling it – Well Sold.
—————
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 the real estate brokerage.