Sign of the Times
A 74-unit condominium building in Everett has become, with a generous dollop of state funding, a 74-unit apartment building with 47 affordable units.
The building, Parkway Heights, sits on Chelsea Street. The skyline views from the sixth floor are said to be grand. Also sweet: The developer, Winn Residential, got almost $3 million in tax credits from the state, and a $5.9 million loan from the Mass Housing Partnership, to convert the building from condos to apartments.
I'm not sure I entirely understand why it costs millions of dollars to convert condos to apartments, or luxury to affordable. Shouldn't it only cost money to convert from affordable to luxury? But maybe the building simply wasn't finished.
The initial loan was approved about a year ago. The building is now being marketed. I wandered across it while researching this morning's post and thought, what an interesting example of what can happen during a real estate downturn.
Anyone aware of other examples of condos becoming apartments?
Enjoyed this post? Get blog updates delivered to your reader. Click here.
A conversion from luxury, i.e. market rate units to affordable units would necessitate capital for greatly reduced and/or lost income as the rents for the affordable units will be capped at the targeted income level, i.e. 60% of the median income. The building now consists of more 60% which is a remarkable achievement for the developers, the City and MHP. A conversion to apartments from condos would require funding to allow the developers to hold the asset long term during stabilization, where previously they would have gotten their profit via sales on a much shorter time frame -even in this market.
Kudos to Everertt, MHP and Winn.
Apologies.. editing error: The building now consists of more than 60% affordable units...
Yes, the development called Charles Passage on Second Street in East Cambridge was intended to be sold as condos. A last minute change to shift the parking from underground to the back of the building, which was granted by the Board of Zoning Appeal on the grounds that it would be a hardship for the developers to put the parking where it was originally planned for, gave it the appearance of a Motel 6, and none of them sold. They were then rented, and this change prevented the developer from converting a nearby industrial building into condos, as the financial backing for the secind project evaporated, due to the financial disaster of Charles Passage.
I recently heard that the new Bay State Commons luxury condo development in Westborough (40+ units?) hasn't officially sold a single unit, and is now going to be converted into luxury rentals instead.........a sign of the times. The units were priced between $400 and $700K for 2 bedrooms, which doesn't make a lot of sense, since you can buy a pretty spectacular 5-bedroom Colonial in Westborough for that price. The developers just didn't do their homework on this one, and they clearly ignored market trends that were already occurring at the time they broke ground for the project. Strange decision-making.
There is a condo building across from the trailer park in West Roxbury called MarshviewPlace.com - when they built it, they marketed it as condos. Then they turned it into rental apartments for seniors. Then they turned it into condos again. Then they turned it into market rate apartments. Then they had a fire. Now they're marketing it as condos. Again.
Talk about an identity crisis!
Commenter #1 said: "Kudos to Everertt, MHP and Winn."
Actually, kudos to the Mass. taxpayers for getting suckered into this boondoggle.
"Anyone aware of other examples of condos becoming apartments?"
See: State of Florida, USA
This blogger might want to review your comment before posting it.
Recent Posts
browse this blog
by categoryINside Boston.com