(Jia Hu edited 胡佳稿)
Sept. 27th, at the NOIAP’s meeting-Windows on the Waterfront, which was about real estate projects in the new “Innovation District” in Boston’s Seaport District, our company’s President, Patty Chen introduced the Investment Program to Boston’s real estate developers of the “Innovation District”.
Boston Hub developers going with apartments
A top Bay State developer said he’s not convinced that new condos will ever be built again in downtown Boston, especially since everyone is switching over to apartment towers in the wake of the luxury real estate market collapse.
“I assumed our 21-story residential building would be condominiums,” said Stephen Karp, chairman of New England Development, who expects to break ground on the Northern Avenue project at Pier 4 next spring. “But that market has changed so much over the past few years … we don’t think it will come back for a long time, and we don’t know if it will ever come back.”
Karp — who made his remarks to a packed meeting of the commercial real estate group NAIOP at the Renaissance Hotel yesterday — joined a panel of Seaport developers cheering the successes of Boston’s rejuvenated waterfront with a host of new restaurants and offices. But the enthusiasm was tempered with the realization that waterfront condos will have to wait.
Charles Reid, executive vice president of Boston Global Investors, the Boston-based group that expects to start construction next year on Seaport Square, a 6.5 million-square-foot, mixed-use development including residences, offices and retail shops, said the market is not ready for new condominiums. “The biggest four-letter word — beside bank — is condo,” Reid told the Herald. “No lender will finance condominiums right now. Our first phase will be 1,100 apartments.”
Developers say the glut of luxury units and sluggish sales have kept lenders at bay. Three major luxury projects in the downtown have struggled to sell out their buildings. The W Hotel & Residences on Stuart Street has sold just 46 of 123 units, the nearby Clarendon, closed on 66 of 107 units while 45 Province in Downtown Crossing has 44 of 150 units sold, according to the Warren Group.
John Drew, president of the Drew Co., who is planning a 2012 ground-breaking for Waterside Place — which includes a supermarket and 236 residential units across from the Boston Convention & Exhibition Center — said he switched the project from condos to apartments due to market changes.
But Drew said condos could be a part of future development. “Right now, there’s no interest by lenders in projects with hundreds of condos,” he said. “But the markets run in cycles and at some point, they will be back in favor.”