News
The Future: Buy v. Rent
February 15, 2011
| Millennium Partners Boston's Tony Pangaro recently changed Hayward Place from condos to mostly rental apartments and announced plans to start construction this summer on the $200M, 265-unit building downtown. |
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| We snapped Tony in his office overlooking the Boston Common to learn why this is such a great time to build rentals. He says aftertwo years of holding back, the time is ripe for construction of Hayward Place because there's so little luxury product downtown and a strong demand. Tony?s counting on finding tenants among suburban empty nesters fed up with shoveling snow and successful young professionals who are secure in their jobs and like the downtown lifestyle. It's hard to argue with Millennium?s record in reading the market. It hit the mark with the new Ritz-Carlton Residences in ?01, the One Charles condos in ?05, and sold the old Ritz hotel after renovating it. |
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| Joe Larkin is the finance guy in the Millennium-Boston front office. Upscale rents have just about hit $4 PSF/month to make construction feasible. Meanwhile, construction costs have comedown enough to build at $500 PSF total development cost. Tony says the team?s challenge is to build apartments that have luxury condo quality and yet succeed in leasing. They have to find ?thesweet spot where rent and quality converge.? He expects the average two-bedroom, two-bath to rent for $5,000 a month, with a 15% swing within the building. |
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| Intern Stephen Ackerbloom and Millennium-Boston's third principal Kathy McNeil, who manages design and construction. The 15-story, glass- and brick-clad building designed by NYC-based Handel Architects will feature large open interiors, perfect for the modern multi-tasker who wants to cook, work, and talk to guests at the same time. (We sympathize; in the span it took us to write this issue, we filed our taxes, called grandma, and had, then lost, the best idea for a start-up.) They'll have floor-to-ceiling glassin living rooms and many will have gas fireplaces. A resident-only club will have a library, bar, dining room, and fitness facility. Tony says that Hayward Place—its look, features, and market position—is the next phase of what he and his partners did with the 360 condominiums at the Ritz and the 234 condos at One Charles. Whether their timing is luck or skill, he says, ?We like to be the first guys to build when the economy is ripe.? |
