Welcome back to Property Lines, a column by veteran real estate reporter Alexei Barrionuevo. Each week on Tuesday, Barrionuevo will report on housing trends, real estate deals, and major business moves right here on Curbed.
Not every real estate boom is created equal. And in Boston, one of America's oldest cities, a historic building boom is taking on a distinctly Bostonian feel.
In Miami, New York, and San Francisco, developers are touting starchitects and leaking the identities of bold-faced namesVIPs who will deign to own a luxury unit and visit, perhaps, a few times a year. They are showcasing penthouses like they are Jackson Pollocks or Monets, and billing them as perfect repositories for such fine art.
Not so in Boston. Just ask Richard L. Friedman, the lead developer of the Four Seasons Hotel and Private Residences One Dalton. "Boston has a sort of long term history of not being a boom-bust kind of place," Friedman said. "We don't get Russian oligarchs. You don't get that kind of thing here, and we don't want it."
Boston, in case you haven't heard, is in the midst of adding about 8,000 new apartments and condos over the next three years, doubling the amount built in large luxury complexes since the 1960s. Just last year, the city approved construction projects totaling more than $3 billion. By the beginning of 2015, some 14.6 million square feet of new buildings were rising in Boston, according to the Boston Redevelopment Authority.
Some five years of pent-up demand, a thriving economy riding a biotech and tech start-up expansion, and a pro-growth mayor have driven developers to throw up the construction cranes.
"It was like the Kentucky Derby when they rang the bell," said Steve Samuels, a developer who is building the Pierce Boston a mixed-use tower that will bring 109 condos and 240 rental units, and over 20,000 square feet of retail to Boston's Fenway neighborhood.
Boston is also benefiting from explosive growth in air travel into the city, which is spurring more international interest. There are now more than 50 direct flights into the city from abroad. In the last year, airlines have added flights from Beijing, Shanghai, Istanbul, and Tokyo. Emirates Airlines added another non-stop flight from Dubai to Boston, for a total of two a day.
Real estate marketers like to pitch Boston as another example of the same trends driving residential development in New York and San Francisco, in particular the quests for urban housing in walkable downtowns and for ever-more-expensive units with fancy finishes designed by branded architects.
But in Boston there is a different attitude that is defining this moment, one that is more about conservative, old money New England.
Take Friedman's One Dalton project in the Back Bay district of the city. The 61-story condo-hotel will be the tallest new building in Boston in 50 years, and the second Four Seasons in the city. It will feature a 215-room, five-star hotel, along with 180 condominiums ranging in price from $3 million to about $35 million.
"It is significantly more expensive than anything that has ever been built in Boston," Friedman said.
Every unit will feature nearly 11-foot-high ceilings and fireplaces, and some units will have balconies. The slender, triangular-shaped building won't have corridors; the building will have three separate "cores," so residents will get off one of the two elevators and have one unit to the left and another to the right. Elevators will open directly into some units, and the three penthouses will all have direct elevator access, Friedman said. The 50th floor will feature a health club, dog washing, and a private restaurant for residents.
Even though the developers broke ground in January, they have yet to launch a formal marketing program, open a sales gallery, or allow real estate brokers to sell the units. The development is in a "friends and family" period but is signing sales agreements, and is "way ahead of our own projections," Friedman said.
Despite the high price point, the developer expects at least three-quarters of the buyers will be Bostonians, avoiding the kind of "ghost" building of usually empty units more common in New York, London, and Miami Beach. Some overseas buyers have approached him wanting to buy blocks of five to 10 units, but he has refused to sell to anyone he perceives to be an investor only.
"I expect it will be a building people will really live in," Friedman said. "And that's what we want." The developer himself said he plans to live in the building, but not in any of the penthouses.
Two of the penthouses will be duplexes, and all three will measure between 7,500 square feet and 8,000 square feet, with 600-square-foot semi-enclosed decks. They could be customized or combined. How much will they cost? Friedman said they have yet to price them.
"Maybe we should," he said. "But the first thing you are going to say is, 'Is Donald Trump buying it? Or some celebrity? Or Tom Brady?' Then it becomes the story. That is just not what we want."
Maybe Friedman is learning from a competitor. The Millennium Tower, the 60-story spire due to open next summer, has sold more than 90 percent of its 442 condo residences but has yet to unload its 13,000-square-foot penthouse, which is still on the market for $37.5 million. A broker told Curbed Boston earlier this year that it would likely take an overseas buyer to crack that price. A sale at that tag would nearly triple the highest home sale ever in the city ($13.2 million in 2011 at the Mandarin-Oriental).
The luxury real estate industry is expert at stoking such fires. When Extell Development was building One57 in New York, Gary Barnett let slip that the buyers of nine full-floor condos in the tower were all billionaires, which established the project's reputation as "the billionaire's club." When Douglas Elliman started selling the Faena House in Miami Beach, word soon got out that the buyers were from the elite of New York's financial world, and knew each other socially, shaping the project's reputation as an exclusive, private beach club for super-wealthy Manhattanites.
In Boston, Friedman would only share that the Four Seasons has attracted a "Pulitzer-prize winning economist, serious academics or writers," and hedge-fund managers. "They want privacy," he said.
The Four Seasons may not end up being a building filled with international celebrities, but it was foreign money that mostly financed it. The Children's Investment Fund from London, which financed 432 Park and the new Four Seasons in New York, backed the construction loan, and Citibank Private Bank raised $200 million worth of equity, Friedman said.
Then there are the starchitects, or lack of them. Friedman hired Henry N. Cobb, the 89-year-old Bostonian who designed the city's John Hancock Tower. "Surprisingly, many people who are buying units don't know who Harry Cobb is," Friedman said. "I think there is less brand-consciousness here than in other cities. Some of the buildings that have been built have not been as distinguished a group of architects as one would hope."
Samuels, the Fenway developer, agreed. Starchitecture "doesn't matter that much in this marketplace yet," he said. "It's not like in Miami, where everybody is competing with sexy buildings, and you can put your Porsche in your living room, or your Clydesdales in the basement and you can go for a ride on the beach. We are not quite there yet. We are still Bostonians, you know?"
· The Tower That Hopes to Remake Downtown Crossing [Curbed Boston]
· Property Lines archives [Curbed]