Downtown condos to be auctioned

Broadluxe, Modern fall victim to housing slump

The real estate slowdown has hit Boston's condominium market - well, some areas of the downtown market.

Condos in two buildings will hit the auction block in the next two months: the Broadluxe, a loft project in the Financial District near the waterfront, and The Modern, at the fringes of the South End.

Meanwhile, a few blocks away from each, high-end projects are selling briskly.

The premier example: The Clarendon, at the corner of Clarendon and Stuart streets, has put its first 10 units of 103 under agreement in their first three weeks on the market, at an average price of $1,450 a square foot, said its developer, Beal Cos.

The average price for a Boston condo is $570 per square foot.

Once immune to the real estate downturn that hit Boston's suburbs hard, the downtown Boston condo market is now sorting itself out. With the credit crunch tightening lending, and a gloom pervading the housing sector, buyers are being more cautious and opting for properties in the city's core neighborhoods, which they feel more confident will hold their value.

"There's no urban pioneering in a soft market," said Debra Taylor Blair, president of Listing Information Network which tracks sales and price data for the downtown market. "In a soft market, the fringe areas tend to depreciate a lot quicker than properties in known and established neighborhoods," she said.

The Modern defines a "fringe" project. It was a bold attempt by developer New Boston Ventures to extend the boundaries of the South End across Massachusetts Avenue to Northhampton Street, by constructing a 25-unit project near a gas station. Fifteen units in The Modern have been sold, for about $534 per square foot.

The remaining 10 will be auctioned May 18, according to Accelerated Marketing Partners, which was hired by New Boston Ventures to conduct the auction. The minimum prices the developer will accept for many of the units are in the mid- to high $300,000 range, or $327 to $379 per square foot.

During a boom period, The Modern's location would be considered an "emerging" neighborhood, a gentrifying area where attractive housing could still be gotten at a deal. The Modern also offered access to the South End's restaurants and other amenities. But sales slowed, said Jon Gollinger, chief executive of Accelerated Marketing.

The project, near the back of Northeastern University, promises to be a "fantastic location," he said. But, "when the core [South End] starts getting to be a better value, people move back in," Gollinger said. "That's occurred all over the country. Boston's no exception."

TD Banknorth seized the Broadluxe project in a foreclosure last July, according to court documents. Now nearing completion on Broad Street, all of the building's 44 units will be auctioned in early June, TD Banknorth's spokeswoman, Jennifer Carlson, confirmed yesterday.

The construction contractor said the bank foreclosed after the Broadluxe's developer, Franklin "Chip" Norton of Frankly Realty Advisors, fell behind on the construction schedule because the old building was not structurally sound. The developer was "running out of money" to complete construction and TD Banknorth apparently was unwilling to extend more credit, said Peter Martini, chief executive of the contractor, A.J. Martini Inc. The building is now the subject of several lawsuits between and among contractors and other principals, including one by Martini against the developer for $4.5 million, which he said his firm is owed for work.

Norton did not return calls to his office for comment.

Diane Maloney of the Marketing Group said her firm initially sold more than half of Broadluxe's 44 units when the project was on the market about two years ago; those purchase and sales agreements were terminated in the foreclosure.

At the time, those units sold at an average price of $675 per square foot. This time around it will be "very difficult to get that," Maloney said.

These ill-fated projects are in sharp contrast to, say, The Clarendon and 285 Columbus, located in the South End.

The Clarendon's appeal is its location - in the Back Bay near the Hancock building -which "is 200 percent," said Beal, explaining, "If 100 percent is perfect, this is better."

Wayne Lopez, managing director of Otis & Ahearn, a Boston real estate marketing and sales firm, said 38 of the 63 units at the 285 Columbus condo project, which is near the trendy Mistral restaurant, have sold since December. Prices averaged $804 per square foot.

Kimberly Blanton can be reached at blanton@globe.com.