Last week, public officials unveiled plans to build the Waterfront Square at Revere Beach.
This project is going to be huge!
According to the Globe, it will include a 13-story hotel, 902 condominiums, and nearly 200,000 square feet of office, restaurant and retail space. It will cover ten acres of land.
The first phase of the development includes the hotel, with luxury condominiums on the top eight of 13 floors, an office building, and a four-acre park with parking for 300 cars underneath. Nine residential buildings, the highest 13 floors, are planned in later phases, through 2016, north of Wonderland Station as far as Revere Street.
This is interesting, because a couple months ago, a banker contacted me for my opinion on (separate) plans to build a (smaller) condo development on Revere Beach.
I told him that I knew very little about the real estate market in Revere (this is the Boston Real Estate Blog, after all, not the Suffolk County Real Estate Blog), but was willing to share my thoughts with him.
So, what was my advice to the banker?
Our emails, after the break:
Hi John. I stumbled upon your page and thought you might be able to answer a few questions I had concerning the condo market in the suburban Boston area.
I’m looking at possibly financing a project right on Revere Beach and was wondering what your feel of the market was up there as it was difficult to find any real comps.
Would a project in this area be a legitimate option for someone wanting to commute into the city? More specifically, young professionals?
Thanks, look forward to hearing from you!
Please feel free to send me any and all questions you may have about the Boston real estate market, I’d be happy to offer some advice and opinion. I’ll keep it in strictest confidence.
I’m not sure the question should be “will people want to commute from Revere Beach into Boston”, but “will people want to live on Revere Beach”?
If you haven’t yet been to Revere Beach, I think you should visit to get an idea of what it’s like, currently. I’m sure with your research you’ve read a lot about its history. It’s become kind of a run-down neighborhood. The area is full of single-family and multi-family homes made up of people at the lower-rung of the economy. There is a supermarket within driving distance, but little else in the way of 24-hour a day appeal. There are a couple of bars on the street, but nothing you’d want to spend much time in. The strip itself is made up of unattractive homes and a good number of fast-food restaurants (no chains). Kelly’s Roast Beef is the most famous of them all – it’s open late and serves good food. I am up there three or four times a year, but only to stop at Kelly’s.
I haven’t been there during the summer, however. I can’t say what it’s like, then. It’s not popular enough to attract outsiders. I assume it gets a good number of younger folk racing up and down the street in their cars (actually up the street, since it’s one-way for much of it). The beach is not that attractive.
Regarding existing housing, there are several condo projects on Revere Beach Blvd that would be considered “cheap” by Boston standards (say, $200,000 – $300,000 for 800 square feet – $250 / SF or so?). From what I remember, several of these buildings were built or converted into condos in the mid-1980’s, and then several of the buildings went into foreclosure when the market dropped after 1989. There may be a message there.
(One building is called the “Saint George” and another is OceanGate Towers – I don’t know if either of these had bankruptcy problems.)
Regarding new construction, there were several condo projects built or proposed over the past several years. One off the strip is called Belle Isle Condominiums. Another is called Surfside Lofts and another is called The Ocean Club. The Atlantica was an 80-unit building completed in mid-2005. Most units sold under $400,000, around $280-340 / SF.
The Ocean Club will add 242 units to the beach. That’s a lot. Plus, they are asking in the $350 – $450 / SF range, which is higher than any other properties for sale. Again, cheaper than what you’d find in downtown Boston (where average is probably $500 overall, and $800 or more / SF for new construction).
I’ve been skeptical about The Ocean Club, but according to our local MLS, it looks as though 50-60 units are under agreement, already, at prices ranging from $350,000 – $700,000.
I think there is a very limited supply of people who would be willing to live on Revere Beach. Those that do may be people who don’t commute into Boston – perhaps they work in the area or to the north of Boston. The new Harbor Tunnel speeds the commute, somewhat, but there’s still traffic at rush hour. This can be a deterrent, but not more so than the other thousands of people who drive in, every day. (There are two subway stops nearby, which would be very useful to young professionals needing access to Boston.)
Those who don’t already live in Boston would need to be persuaded to live in Revere. They have no idea how far (or close) it is to Boston. Those that already live in Boston would need to be persuaded to move outside the city, and persuaded to move to Revere. I’d say a fair number would rule it out. If the choice is downtown Boston (Back Bay, South End, Beacon Hill) and a smaller place versus Revere Beach and a larger place, I think half would choose the smaller place, or choose another of Boston’s neighborhoods such as Jamaica Plain, Dorchester, or Brighton. Those are within the city limits.
It’s been a surprise to me that more people aren’t being driven by price – they still seem to be focused on location. I guess if they can’t get the location they want, they just end up not buying. I deal with a lot of first-time homebuyers. Last year was really slow, in the spring. The year before and this year, it’s been busy. The buyers just jumped back in, with lots of money and focused on buying secure investments. Seeing as Revere Beach is so undeveloped (underdeveloped?) the average young professional may be too scared to take the chance. I mean, what if it never takes off as a neighborhood? If the young buyer is planning on a five-year stay before moving to the suburbs or moving-up and/or into the city, will they be willing to take a chance?
So, I just asked my partner what he thought of when he thought of “Revere Beach”. He said, “Tacky”. “Inconvenient”. And, also something else which I won’t repeat.
When I think of projects such as this, I think of young men buying their first home. They would be willing to forgo local amenities for a unique and/or cheap place to live. If this was part of your target market, I think it would have appeal.
The “traditional” young couple might not be as willing. The empty-nester from the local area may be willing. The gay male couple would not be, due to its reputation, local architecture, and distance from downtown.
I hope this helps. I can be more specific or less specific, if you want to send me more questions.
Development likely to have Revere Beach gleaming anew – By Thomas C Palmer, Jr., The Boston Globe
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