Park Lane Seaport, with its swank apartments overlooking Boston Harbor, is shouldering great expectations.
The two-building luxury complex, at 225 Northern Ave., was built in 2006 and is located in the heart of Boston’s exploding Seaport District. It recently hit the selling block, and real estate professionals think it’ll move for $300 million, the highest aggregate price ever for a Boston rental property.
If it does, it’ll pave a new and expensive road for the luxury rental projects still underway in the city.
If it doesn’t, it may mean that investors think Boston has absorbed all the high-end apartments it can stand.
Boston is one of the big U.S. markets with a seeming glut of luxury apartments – and a dearth of affordable units. Will investors pay a whopping $645,000 a unit for a 13-year-old property in a neighborhood CoStar research says can expect another 1,800 units of high-end rentals by the end of 2020?
“Yes, this year and next year we will have some additional deliveries,” admitted Chris Phaneuf, the managing director at brokerage HFF who is handling the sale of Park Lane Seaport for J.P. Morgan Asset Management. “Once that’s done, though, there’s nothing in the pipeline. In the meantime, there’s 3 million square feet of commercial development in the Seaport.”
He’s talking about the further office development in the Seaport District. Seattle retail giant Amazon alone is set to add another 1 million square feet of space in the neighborhood in the next year. Pharmaceuticals and biotech companies see the Seaport, with its plentiful bars and restaurants, as an attractive alternative to other Boston neighborhoods.
That should drive demand for high-end rentals, said Phaneuf.
The highest cash value price for a single property in Boston’s apartment market was reached last year, when New York’s Clarion Partners paid $238 million – or $690,000 per unit – for Watermark Seaport, a 3-year-old, 20-story, 346-unit tower also overlooking Boston Harbor in the Seaport District.
There have been rumblings that some of the luxury rental towers popping up in Boston have had to make concessions – offering a free month’s rent, parking or waived move-in fees, according to CoStar.
Even if that’s true, rents are growing, points out Aaron Jodka, director of research in Boston for Colliers International. If Boston as a whole is reaching its limit, the Seaport District is not.
Park Lane Seaport, at 13 years old, is ancient by the new Seaport District standards. But its location is prime, and the area is booming.
“I don’t know if [Park Lane] will hit an aggregate price record or not,” Jodka said. “But I do think there will be tremendous interest from foreign and institutional buyers when a property in Boston’s hottest submarket, like Park Lane, hits the market.”
The property comprises two towers of 13 and 21 stories. Units are a mix of studio to three-bedroom layouts, featuring stainless steel appliances, quartz countertops and dramatic harbor views.
The property has a 24-hour fitness center, two rooftop decks, residents lounge with a billiards room and a gourmet kitchen, and 24-hour concierge service.
