Cooperative Apartments – Why We Love Them,
Batterymarch Group LLC is a full service independent real estate brokerage firm specializing in the downtown Boston market. More about our services here.
In this issue:
Cooperative Apartments – Why We Love Them, Part 1
Property Spotlight – 282 Beacon, unit 6, $5.7 Million, Kind of Pricey, But Worth a Look
81 Beacon Street, unit PH – Amazing Potential, Reasonable Value – Well Bought
14 Walnut Street –$10.5 Million, This Isn’t Downton Abbey! – Well Sold
What’s Catching Our Eye
Cooperative Apartments – Why We Love Them, Part 1
We’re big fans of cooperative apartment ownership for a host of reasons. We’re not going to get into all of the nuances of co-op ownership here, but we’ll highlight one of the many things we find appealing.
Financial Flexibility – Unlike a condominium where owners get a unit deed, in a co-op buyers receive stock in the corporation that owns the property, together with a proprietary lease for their apartment.
Since the corporation owns the property, the corporation can mortgage the property. The benefit to this comes into play when the property needs capital improvements for general building maintenance, like a new roof, windows, elevators, repointing, etc. Having the flexibility to use 15 year financing to fund the capital improvements that generally have an expected life of 25 – 30 years is prudent in our view.
In a typical condominium association, major capital projects are funded via special one time assessments, which can be substantial. If a unit owner is contemplating selling their unit in the near term, it’s unlikely that they will recoup the full amount of the special assessment (this, combined with a general aversion to large special assessments, leads to vital maintenance getting deferred). In a co-op, the mortgage liability transfers to the new shareholder, so in essence the co-op owner only pays for what they use.
There is a myth in the marketplace that co-ops are more expensive than condominiums. Setting aside the obvious point that the co-op fee includes things like property taxes, co-op fees, in fact, offer a more realistic snapshot of the true cost of ownership.
From time to time we highlight properties that are actively offered for sale. We tend to focus on unique properties that are in need of updating. We’re happy to set up showings of these properties and assist with preliminary renovation budgets.
282 Beacon Street, unit 6 – Co-Op Apartment Offered at $5.7 Million
Unit 6 at 282 Beacon Street is currently offered at $5.7 million ($1,809/sf). This 4 bedroom, sixth floor co-op has 3,200 square feet of living space and comes with two outdoor parking spaces. The monthly fees are $7,183, which includes property taxes. When you strip out the taxes and factor in that this is a staffed building and that the unit is serviced by two elevators, the fee is in line with comparable condominium fees.
We don’t hide the fact that we’re ardent fans of pre-war style apartment buildings, and this one is no exception. Based on the way this building is situated on the lot, the unit has windows on all four sides. Located on the waterside at Beacon and Exeter Streets, this is an A+ location.
Units in this building don’t turn over very often. The seller has owned this apartment for many years, hence the unit is dated. Like most buildings of this vintage, it was built to accommodate live in domestic staff. While the floor plan has been updated over the years, there are still some hints of the “service side” of the unit.
Some serious money will need to be spent to bring the apartment up to today’s standards. The trick is to engage a top notch architect and general contractor before committing to the purchase and get a comprehensive presale proposal. We don’t see it as a full gut renovation, but based on the amount of updating needed, the asking price seems a bit rich to us.
We should point out that the seller unsuccessfully tried to sell the unit back in 2015 for $4.35 million. Contrary to popular belief, we see this end of the market as flattish in recent years, so we’re a bit puzzled by the 33% markup. The property is listed with Campion & Company, and if you’d like more information, or would like to set up a showing, feel free to reach out to us - we’d be happy to set it up.
Well Bought/Well Sold
81 Beacon unit PH – Amazing Potential, Reasonable Value – Well Bought
Sticking with our co-op theme, the penthouse apartment at 81 Beacon Street has a new owner, changing hands last week for $6.3 million, a 25% discount to the original asking price of $8.45 million. This 3,300 square foot, 10th floor, 3 bedroom apartment has direct elevator access, unobstructed views from all four sides, and includes one parking space at the Brimmer Street Garage.
81 Beacon sits on the northern edge of the Public Garden, which gives the units a clear southern exposure and maximum sunlight. A little tidbit of trivia - Joe Kennedy made 81 Beacon Street his home base while overseeing JFK’s successful 1952 bid for the United States Senate.
Like many of these units, this one is pretty tired and in desperate need of a comprehensive renovation. We have some insight into the plan for this unit as we did some behind the scenes advisory work for the buyer. It’s fair to say that the end result here should make this one of the finest apartments in the City.
From a valuation perspective, when you back out the value of the separately deeded Brimmer Street Garage parking space, that brings the price of the unit to roughly $5.8 million ($1,757/sf). We wouldn’t describe this as a bargain (and certainly not much of a co-op discount), but given the uniqueness this is definitely market correct, we’re calling it – Well Bought.
14 Walnut Street – $10.5 Million, This isn’t Downton Abbey! – Well Sold
It took 672 day on the market, but 14 Walnut Street finally sold last week for $10.5 million ($1,265/sf). The original asking price for this 8,300 square foot, 6 bedroom house was an astonishing $15 million, so the final sale price represents a 30% discount.
The property features a huge 5,000 square foot private garden (I guess at that size you could call it a back yard) and over 60 windows, so it really gets great sunlight. In our book, things go downhill from there.
One of our biggest gripes with this house relates to the main entrance. While the house has 65 feet of frontage on Mount Vernon Street, you enter on Walnut Street through what feels like a service entrance into the basement. Maybe this is a bit picky, but for $10.5 million you’re allowed to be picky.
The kitchen in the basement also doesn’t sit well with us. If you’re going to live-in a 8,300 square foot house, would you really want your kitchen in the basement? No doubt this was a great set up back in the day when cooks and scullery maids toiled away “downstairs” and served proper meals in the first floor dining room. This isn’t Downton Abbey!
We had a few other things on our list, but it’s probably best if we just leave it at that. We’re not surprised that this was a dual agency deal, it was exceptionally – 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.