68 Beacon Street, Apt. 3W - Co-Op Discount?
68 Beacon Street, Apt. 3W - Co-Op Discount?
“The Batterymarch Insider” is a brief snapshot of our current market thinking and some highlights of what we see going on in the downtown Boston market. As always, our “terms of use” apply. We encourage you to subscribe.
In this issue:
36 Commonwealth, unit 1 – $7.5 Million Triplex With No Owner?
68 Beacon, apt. 3W – Co-Op Discounts in Boston?
192 Commonwealth, unit 9 – Well Bought
What’s Catching Our Eye
36 Commonwealth Ave unit 1 – A $7.5 Million Triplex With No Owner?
After 140 days on the market, the price of unit 1 at 36 Commonwealth Avenue was cut by 6% last week. The asking price for this 3,565 square foot 4 bedroom, lower level triplex now stands at $7.499 million ($2,104/sf).
The last sale was $7.5 million back in 2016 when the then CEO of General Electric made this his Boston home when GE relocated its corporate headquarters to Boston. There was a lot of fanfare around GE moving to Boston, but the GE story quickly fizzled out, so we’re not surprised that this unit will likely be sold at a loss.
An interesting twist here is that the title to the property is held in an LLC. While there is nothing uncommon about holding real estate in an LLC, in this case the LLC was involuntarily closed down by Court Order back in 2019, so it’s not clear who actually owns the unit. The moral of the story is that if you hold real estate in an LLC, don’t forget to send the State their annual $500 fee.
Pros: Location – first block of Commonwealth, good outdoor space, two car garage, new HVAC.
Cons: The rear alley can get congested with commercial traffic servicing the Taj Hotel (when it reopens), two bedrooms are below grade.
We don’t see the wow factor here and $7.5 million seems like a big price for a lower level triplex. Someone will love it, but likely at a lower price.
68 Beacon Street, Apt. 3W - Co-Op Discount?
Cooperative apartment 3W, a 2,750 square foot three bedroom at 68 Beacon Street, hit the market this week with an asking price of $4,400,000 ($1,600/sf). This third floor, west facing unit is obviously less desirable than the upper level apartments, and judging by the photographs, it’s in desperate need of a comprehensive update. Buyers should also be aware of the lack of central air conditioning.
Without going into the nuances of co-op ownership structures, co-op boards have a lot of control over their buildings, including approval of ownership transfers. Private co-op boards have the right to reject any potential owner that they feel will alter the quality of life of the co-op, as long as the reason doesn’t involve discrimination against a protected class. In 2008, the 68 Beacon co-op board reportedly had to pay $2.2 million to settle litigation involving the board’s rejection of a proposed new owner.
There are many advantages to living in a co-op. As a general rule, we think that the advantages outweigh the risks but buyers need to go in with their eyes wide open. In Manhattan, where co-ops are more prevalent, they tend to trade at discounts to comparable condominiums for a multitude of reasons; we think the same should apply in Boston.
In our view, the asking price here is on the aggressive side when you factor in the cost of renovating and that it doesn’t seem to reflect any co-op discount. At the right price, and assuming you pass the co-op board’s sniff test, this could be a very nice apartment.
Well Bought/Well Sold
192 Commonwealth Avenue, unit 9 – Well Bought
It took 252 days, but unit 9 at 192 Commonwealth Avenue finally changed hands last week for $2.942 million ($1,066/sf), a 27% discount to the ridiculous original asking price of $4 million. This 3 bedroom, 2,759 sf, ninth floor unit has a lot going for it. Windows on three sides, direct elevator access, live-in superintendent, right in the heart of the Back Bay.
There is no question that money will need to be spent to update the unit, but based on the price paid, there is plenty of room for improvements without creating a white elephant. Not withstanding the fact that this was a dual agency transaction, this one was – Well Bought.