"The Poor Taste of the Rich"
"The Poor Taste of the Rich"
The Batterymarch Insider
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. These are our opinions, so take them with a grain of salt, our “terms of use” apply. We encourage you to subscribe.
Property Spotlight
“The Poor Taste of the Rich”
Hogwarts Meets Zen on Commonwealth Avenue
314 Commonwealth Ave., unit 4 – “The Poor Taste of the Rich” – Offered at $8.99 Million ($1,889/sf)
DOM – 49, Taxes $105,595/year, Monthly Condominium Fee - $8,094
In 1905, a few years after the completion of the Burrage House at 314 Commonwealth Avenue, The House Beautiful magazine featured the property in a series titled, “The Poor Taste of the Rich.” The article acknowledged that the house “has dignity and a certain grandiloquent beauty,” but questioned “who would choose as a life companion a house like [this one], when simplicity, charm, peace and true beauty were to be had for a fragment of the money bestowed on the rich man’s home?”
The Burrage House took its inspiration from Chateau de Chenonceau located in the Loire Valley of France. The heavily ornamented chateau style was popularized in the United States by Vanderbilt homes in New York and at Biltmore. Beyond the usual Back Bay exterior preservation restrictions, some elements of the interior have been designated landmarks by the Boston Landmark Commission, including the marble double return staircase and great hall.
The building sits on a 55-foot corner lot, so unit 4, a 4,758 square foot 2-bedroom duplex, has a spacious feel and gets good natural light from three sides. The unit comes with on-site garage parking for four cars. If you need more space, the unit can be sold with an abutting 1,399 square foot 2-bedroom unit in the neighboring building for “an additional price” (the units are currently connected).
Zen Associates did the interior design which stands in sharp contrast to the exterior and common elements of the building. If you’re into extreme Zen, this place could be ideal. The minimalist design is punctuated with two hot tubs, one on the private roof deck, and one in the living room – maybe The House Beautiful was right about “the poor taste of the rich”?
Being a 20-year-old redevelopment, it’s fair to say both the building and the unit are showing their age. After 20 years, most mechanical systems and things like roofing are near, or beyond, the end of their useful life (bid cautiously).
The $8,094 monthly condominium fee is steep but maintaining all those gargoyles isn’t cheap – there’s a reason that most Gilded Age homes have been demolished. Factoring in taxes, the carrying cost is a bit over $200,000 a year which is pricey for a limited-service building.
Asking $1,889/sf seems aggressive for an older renovation, particularly in what we see as a maintenance intensive building. If you can stomach the carrying costs, and love the Hogwarts aesthetic, we’d peg fair market value somewhere south of $7.0 million.
Unit 4 at 314 Commonwealth Avenue is offered by Campion & Company.
Well Bought/Well Sold
305 Commonwealth Ave., unit 2 – New Construction Loss on Commonwealth – Well Bought
Last summer, we commented on the ridiculous premiums people are paying for condominium units in new Back Bay redevelopments (see “Paying Huge Premiums for Back Bay Redevelopments – This Won’t End Well”). In the note, we highlighted unit 2 at 305 Commonwealth as the poster child of things to come. The unit sold, and we thought we’d break down the results.
The unit, a 4,286 square foot 3-bedroom parlor and above duplex with two car garage parking, is part of a 2018 four-unit redevelopment. It initially sold for $9.5 million ($2,217/sf) in the spring of 2019. Less than two years later, it was put up for sale for $10.9 million. Long story short, after several price cuts and a new broker, it sold after nearly two years for $8.4 million ($1,975/sf), 26% below the original asking price. Net after fees, the seller took a loss of roughly 16% on the ordeal.
It escapes us why people bid up the prices on freshly redeveloped properties. It’s not driven by supply and demand dynamics as there’s no shortage of well-located premium properties. If your Zillow search comes up empty, give us a call and we’ll rattle off a dozen properties that sellers would love to unload if they can get a reasonable bid.
It looks like the buyer is moving to the sunny side of Commonwealth from their previous digs at 212 Commonwealth which we profiled last November (see “Old Boston vs New Boston – Where’s the Value?”). We’d say that this unit is a significant upgrade from 212 Commonwealth and getting high quality newish construction in the Back Bay for under $2,000/sf is a win, it was – Well Bought.
220 Boylston St., unit 1209 – Herb Chambers Got the Better End of This Deal – Well Sold
He didn’t get the $18.0 million, or $5,353/sf he was looking for, but automotive retail giant Herb Chambers should be thrilled with the $12.5 million ($3,717/sf) he got for his Four Seasons apartment on Boylston Street. Herb paid $8.8 million for the 3,363 square foot 3-bedroom unit back in 2016 and did a top-notch total renovation.
For Herb, who owned two Boston Four Seasons apartments, we imagine that this must feel a bit like getting rid of a dependent, and he can now enjoy his sub-penthouse at the new Dalton Street Four Seasons tower. We bet that he misses the old place - there is something special about walking out of the front door of the original Four Seasons and being in the Boston Public Garden, at the crossroads of the Back Bay and Beacon Hill.
We shouldn’t sell the Dalton Street location short, after all who needs the Public Garden when you can have the Cheesecake Factory across the street? And why go for a walk in the park when you can walk in the climate-controlled Prudential Mall?
The buyer, who appears to be moving within the building, got an exceptional unit, probably one of the nicer ones in the city. We’d venture to say that they probably picked it up at a discount to what it would cost to recreate the unit.
Liquidity at this end of the market is very fickle and we don’t think that the buyer did themselves any favors by working directly with Herb’s sales agent – that may sound like us talking up our own book, but it’s probably on point (see “The Illusion of Fiduciary Duty in Real Estate”). At the end of the day, the buyer got an amazing apartment, but we’d say that Herb got the better end of the economics, it was – 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 real estate brokerage.