CONDOMINIUM TRENDS 12/7/06 - An interview of Boston’s leading Real Estate Marketeer, Kevin Ahearn of Otis & Ahearn, Inc.
THE NEW LUXURY LOFT: BOSTON FOLLOWING NY
High-end luxury lofts may be old news in New York’s Soho, where the starving artists who pioneered the area have become as rare a sight as affordable restaurants, but in Boston, the loft market had remained at a more entry level price point…until now.
Several new projects are breaking boundaries in downtown Boston for high-end loft living. Chief among them is the 54-unit former Virgin Records Building at 360 Newbury, designed by renowned architect Frank O. Gehry, developed by Boston Residential Group and marketed by Otis and Ahearn, Boston’s premier residential brokerage and marketing company. With high-style, luxury finish units selling for between $650,000 to over $2 million, the project is pushing the loft market into a whole new arena.
“The loft concept started in Boston as a fairly modest build-out, offered at inexpensive prices and in pioneering locations,” says Otis & Ahearn president Kevin Ahearn. “Today, it has expanded dramatically into very expensive housing as it should. We are marketing another project downtown — Lafayette Lofts, at the corner of Kingston and Essex — with a price range starting at $500,000 up to $1.5 million and there are more coming including in Midtown / Downtown Crossing. The whole loft market has picked up a lot of steam by going to a higher price point and a higher finish” broadening buyer profiles.
CONDOMINIUM SALES SURGE IN EMERGING URBAN MARKETS
As high-end condo sales push the $1M+ mark in Boston, a large segment of the condo-buying market has found itself priced out of the downtown area.
But that doesn’t mean those buyers aren’t purchasing condos. They are simply moving into new urban emerging markets in the immediate environs, such as Chelsea, East Boston, Watertown, Jamaica Plain, Medford and more.
“These new urban markets are really a trend worth watching,” says Kevin Ahearn, president of the Boston-area brokerage and marketing firm, Otis & Ahearn. “Our data shows that even as the peak market downtown has slowed down a bit, these new markets have surged ahead in sales, particularly in the sub $500,000 price point.”
New urban areas are often on T lines, with good access to downtown with amenities and services. The neighborhoods are already dense, with existing multi-family homes, and new condo developments fit easily into the urban fabric.
“These areas are great for people who want to get out of the primary home, into one-level living, but don’t want to move away from family, friends or grown kids,” says Ahearn. “The young professionals, empty nesters and divorced middle-aged people—all big factors in the condo market—are turning to these areas as affordable alternatives.”
HYBRID HOTEL/RESIDENTIAL PROJECTS ARE THE FUTURE OF LUXURY LIVING
A spacious loft with high-end finishes, sweeping views…and a full service restaurant, spa and maid service? Sounds like a sybarite’s dream, but it’s fast becoming reality, due to the dramatic expansion of hotel flagships into mixed-use hotel and residential properties.
Heretofore the downtown Boston market between 1980 and up to 2000 had only 2 combination residential and hotel flag properties – old Ritz (Carlton House) and the Four Seasons. Since 2000 the additional hotel flags that have arrived, are under construction or looking in the market include a 2nd Ritz, InterContinental, Mandarin, Regent and multiple brands / flags of Starwood including a W Boston and possibly a St. Regis.
It’s only a matter of time when more arrive as part of mixed use developments and it’s very exciting for Boston.
“The Four Seasons and the Ritz, the Fairmount hotels—they’re all ramping up their efforts in this area,” says Kevin Ahearn, president of Boston-area brokerage and marketing firm, Otis & Ahearn. “On the business end, it’s a win-win situation. The hotel is in the base of the building, which has less view, and thus less value for residential. The residential portion is above, which gives the hotel a built-in market for its services.”
And for the buyers, Ahearn says, it’s the services that win them over. “The fabulous spas and exercise facilities; the great restaurants and celebrity chef kind of appeal; the maid service and custodial amenities…that’s hard to beat.”
For affluent purchasers who travel frequently and may have second and third homes, there is also the appeal of the “lock-and-leave” security that such projects offer. “Prosperous retirees may spend time in Florida, and just want a nice place with no upkeep to land during the holidays, to see kids, etc.,” says Ahearn. “ And for empty nesters, coming in from the suburbs and still working, these places give great access to downtown and the workplace, and services that make their lives easier.”
TWICE THE SHOWER AND HOLD THE TUB
Large soaking tubs are no longer the height of luxury, if current trends in condo interiors hold true. Instead, more and more buyers are requesting oversize showers with multiple heads, glass enclosures, benches and more—and eliminating the tub altogether especially in the 1 & 2BR units.
“It seems to come from the hotel influence,” says Kevin Ahearn, president of Boston-area brokerage and marketing firm, Otis & Ahearn. “Many of the luxury hotels have dropped the tub in favor of these large shower enclosures that open right onto the sleeping area, showers with all the spa-like bells and whistles. We find that’s what condo buyers are asking for.”
Another trend? Like the tub, enclosed kitchens seem to be a thing of the past. “Absolutely everyone, except buyers of the largest units, want the big open kitchen, dropped right into one end of the living area, with very high-end finishes. The kitchens are so high quality, they have more of a dining room look,” says Ahearn. “People have moved definitively away from the small, separate kitchen. They want entertaining Kitchen where there is interaction with the living space and with other people and high end appliances, even when they don’t cook.”
PERSONALITY OVER PARKING
Downtown loft and condo conversions are almost always full of character, abounding in unique spaces and architectural detail. One thing they may lack, however, is parking. Yet while it was once considered obligatory to include parking in any condo development, more and more buyers seem willing to trade car convenience for character and fabulous building locations in the middle of everything.
“Most loft deals in urban locations were once offices or warehouses, and the vast majority have very little parking, if any,” says Kevin Ahearn, president of Boston-area brokerage and marketing firm, Otis & Ahearn. “But we are finding that today, people are willing to compromise in that area. They want the beams and columns and big windows and unique qualities of interesting conversions — for this type of buyer the offsetting feature(s) diminishes the parking feature requirement within other segments of the market.”
When I first started writing this real estate column 35 years ago, “condominium” was a strange and unfamiliar word. I had to explain what it was in every column in which I addressed the subject.
RISMEDIA, December 19, 2006—Change, as they say, is the only constant. And it’s certainly no different in the real estate industry. Since his concise analysis of the real estate industry in his 1997 book, Real Estate Confronts Reality, Stefan Swanepoel has risen over the years to visionary status, according to many in the industry. His 13th book, The Swanepoel Trends Report, published earlier this year, offers important and insightful forecasting of the issues that stand to most impact the real estate industry. Here, Swanepoel prognosticates on the year ahead.
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