There was a time in the not too distant past that college students were clamoring over each other in order to buy their first home and ‘grow’ into it, complete with spouse and kids. Ya know, two-car garage, big Volvo and a dog that never barks. Times have changed – with the economy a bit rocky and people moving into “up and coming” neighborhoods or fixer uppers to save cash renting is hotter then ever. Young professionals and college students alike are trading in their white picket fences for ‘destination living’ communities, complete with shops, cool cafes and even swimming pools. #Boom!
A survey conducted by the Center for Behavioral Economics at the Federal Reserve of Boston found that since 2008, owning a home has lost its allure among young people. The new epic dream? To rent a no-frills apartment in a community where shops and cafes are just a few steps away. How quaint.
Culture also plays a part in the change. With people getting married later in life and having kids later, it makes sense that home buying would also happen at a later stage in life. Young professionals don’t want to be mowing the lawn or doing house maintenance on the weekends when they can go out with friends. Assets are considered clothes, travel destinations and virtual goods, not homes and Home Depot stuff.
Planned community living has become the new reality for many young people, as they witnessed what happened to their parents, grandparents and seemingly half of the population. Why go through the pain of foreclosure when you can stay mortgage and debt free?
PS. With apartment renting so hot, so is a gig as a real estate agent. Email Ben Robbie <email@example.com> to inquire about putting your sales savvy skills to work!
Apartment building ready to rise
If all goes according to plan — a rare occurrence in Back Bay construction recently — crews will begin work on a 28-story residential tower whose owners have waited more than two years for the right time to build.
AvalonBay Communities said it will start construction early next year on Avalon Exeter, a slender glass and steel building on the edge of the Prudential complex. After sitting on the project because of the recession, the company says the recent interest in the apartment market justifies moving forward now.
“We feel pretty good that the economy has stabilized, and we think the timing is good to get a building like this under construction,’’ said Michael Roberts, vice president of development at AvalonBay, which develops and owns apartment buildings across the country, including many in Massachusetts.
Located at the Huntington Avenue end of Exeter, the building will offer apartments ranging in size from stu dios to three-bedroom units, with rents ranging from $2,000 to $8,000 for penthouses. Residents will have access to a fitness center and club room, and AvalonBay will use spaces in the Prudential Center garage for resident parking, under an agreement with Boston Properties, which owns that complex.
Elsewhere in downtown Boston a handful of other long-stalled projects, reconfigured to include apartments, are also edging forward, including the 200-unit Dainty Dot building in Chinatown and the 234-unit Waterfront Place in South Boston. City officials said they are also fielding proposals for new buildings.
With the condo market stalled because of wary buyers or tighter mortgage conditions, apartments have become the one hot spot in real estate markets. Rents are up, vacancy rates are down, and lenders are far more willing to underwrite new apartments than other residential or commercial buildings.
“That’s the reality of the market,’’ said John Palmieri, director of the Boston Redevelopment Authority. “People still want to live close to work, to cultural and historic amenities. We have our economic sectors, our research and academic employee base, that are still doing well. Demand has continued to support residential rentals, and developers are better able to secure lending and debt.’’
It also helps that AvalonBay, a real estate investment trust, is able to finance the project itself.
Others cautioned against getting too optimistic about the broader real estate market. David Begelfer, chief executive of the Massachusetts chapter of NAIOP, a commercial real estate development association, said the Exeter project benefits from a “premier’’ location.
“For commercial buildings, it’s still a case-by-case basis. Most development is still pretty much on hold, unless the building has a specific use,’’ he said, such as the new office tower Liberty Mutual is building on Berkeley Street.
Underscoring that point, another building proposed and approved for the Prudential Center, the 888 Boylston office building, is still on hold. It was permitted by the city at the same time as AvalonBay’s apartment tower, and the two projects were supposed to mark the final construction phase at the Prudential complex.
Boston Properties is the developer of 888 Boylston, a 17-story tower that would host offices on the upper floors and retail space on the lower. Part of that project includes buffing up the plaza in front, adding more open space, and additional lighting, plantings, and seating.
The company said it has no immediate plans to start the project and is not planning to switch from office use.
Elsewhere in the city, Boston Properties is finishing Atlantic Wharf, a 32-story office and residential tower at the corner of Congress Street, between the Fort Point Channel and the Rose Fitzgerald Kennedy Greenway.
But Begelfer said that given how moribund construction has been in the downtown area in recent years, the interest in rental buildings is a welcome and striking shift.
“I think the market is ripe for it,’’ he said. “I would not be surprised if there ends up being competition for who gets in the ground first. Otherwise, the market could get saturated.’’
Correction: Due to a reporting error, the original version of this story gave the incorrect title for David Begelfer. He is chief executive of the Massachusetts chapter of NAIOP.
Boston’s robust apartment market is breathing life into another stalled development.
Three years after abruptly stopping construction of one of the city’s largest real estate developments, developer Roseland Property Co. is dangling the hope it will finally resume work next spring, to the relief of many East Boston residents.
The 13-acre Portside at East Pier development has been a fallow slab of concrete since Roseland abruptly stopped construction in 2007, just as the real estate market was beginning to falter.
The land-side section of East Pier, a parcel of three city blocks, has large white pylons that jut skyward, including some that have settled and tilted. On rainy days, water collects into a lake-like puddle. About the only movement behind the locked fence comes from waddling ducks and geese.
Roseland now said it is in talks with two lenders about starting on a portion of the massive complex: the 176-unit apartment building on its west end. If it receives a commitment for funding by year’s end as expected, Roseland said it will break ground by late spring or early summer.
The East Pier project has been a long time coming. The land is owned by the Massachusetts Port Authority, which is leasing it to the developers. It was first proposed in 2000 and was permitted by the city in 2005.
Roseland and its development partner Lennar Corp. planned to build a $275 million, 543-unit luxury condo and apartment complex. It initially was called Portside at Pier 1. It would also have 70,000 square feet of retail space, including a day-care center, restaurant, and health club.
The developers originally planned to price the condos from $500,000 to $2 million. But when Roseland first began working on the site, it encountered problems with the existing pilings supporting the pier, requiring costly reinforcement work.
Then the real estate market began collapsing and construction of luxury condos — which made up the bulk of the East Pier complex — became particularly difficult to finance. Roseland stopped work in 2007, and the site has been quiet since.
“Ten years is a long time to be involved in anything where there are no concrete results,’’ said Bob Strelitz, a founding member of the East Boston Waterfront Development Committee, which has overseen development of the parcel since 1999.
Frustrations aside, Strelitz said Roseland has been in steady contact with the neighborhood and recently previewed plans for the apartment building, which he described as “quite attractive.’’
“Roseland is constant in their assurance that they’re trying to move forward,’’ Strelitz said.
Roseland spokeswoman Nancy Sterling said the company still intends to complete the condo and retail portions of East Pier, but she acknowledged that could take years. For now, though, the hot market for apartment properties — rents in the Boston area have held steady or even risen as home prices have fallen — has made it much easier to find financing for the rental housing component.Continued... more at boston.com via the boston globe By Steve Holt