In yesterday’s edition of the Boston Business Journal, in the real-estate section it read, Selling in a ‘ghost-town’. The article was about 45 Province, a 32-story luxury high rise in Boston’s Downtown Crossing that is struggling to lure buyers since it opened in 2009. In three years only 41.6% of the units have sold. Let’s do the math: 57 units sold of 137 total units that is 80 vacant units or a vacancy rate of 58.3%! This property is bleeding to stay afloat in this volatile real estate market.
The article stated that the reasons that 45 Province is struggling are the location and the price of the units. The 3.59 million- dollar three-bedroom penthouse has been vacant and on the market since May 2010! Location plays a key in any market. Since this location is in the Boston’s Downtown Crossing, there is a lot of vacancy in the area with the huge hole in the ground from the nearby Filene’s project. It’s not an “ideal” location for buyers. For example, a prospective buyer that was interested in the million-dollar penthouse chose a penthouse at Longwood Towers in nearby Brookline. The reason was location and re-sale value.
In my opinion, I feel that 45 Province has exceptional potential. Not only does the property boast luxury finishing’s like the contemporary architecture, floor-to-ceiling windows, bamboo hard wood floors and European style kitchens, it is new construction, which in Boston is hard to come by for now.
If I were to market this property and help it rise above its financial struggles I would consider the following tactics.
1. Establish a Rent-to-Own option at the property. This will entice a whole new demographic who are on the verge of buying but cannot at this point. Also, it will align the property with the multi-housing industry. In which according to last weeks Real Estate section of the Boston Business Journal, the average vacancy rate for larger multi-family apartment buildings is 4.3% which is driving up rental rates to $1,904 per month per unit in the hub. Why not leverage the market to your advantage and step-out side the box? As a current renter this would entice me to buy a unit at this property because I would be held to the standards of a rent and know that a portion of my rent is going to an escrow account to help me purchase my current home.
2. Location. There is not much you can do about location, however you can change the perception of the area in how you market the property. Since Downtown Crossing closes up after 6 p.m. market it as” suburban luxury with an urban location”. Yes, the area may be a ghost town after dark, but this appeals to a certain demographic who wants a quite home to come to after all the hustle and bustle of the day. Find that niche market and you will have no trouble selling your units. Let’s take for example the near by suburban market. According to a recent article in the Boston Daily, real estate writer, Bill Janovitz said, “There are not enough homes on the market to meet demand for median-priced homes in well-regarded towns”. Now with the average house prices in the range of $500,000 to $900,0o0 for a single-family home in need of upgrades, why not entertain the option of a brand new downtown condo location with exceptional finishes? I would opt for this because it’s the best of both worlds: downtown urban location with a twist of suburban luxury.
Boston is known as “The Walking City” and the property is steps from the Boston Common, World Renowned shopping on Newbury Street, the T, and the Theater District. Again, being able to come home to a quite and peaceful location, who would not want to be in this location?
Within a few years, the area is going to be booming with multi-family properties from the Seaport District to the North End. As well as the Filene’s project will be underway again. As a buyer why wait until the properties’ prices skyrocket? And as a broker, you should see the potential for a higher re-sale value at 45 Province.
This is my opinion. Of course the property would have to discuss the details with the key affiliated parties to make sure they would be able to establish the tactics I’ve provided.