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REA
October 09, 2019  

JP Morgan Pitching Luxury Boston Rentals

A J.P. Morgan partnership is shopping a luxury apartment complex that could fetch a record price for Boston.

The 405-unit property, at 180 Brookline Avenue in the Fenway neighborhood, is expected to attract bids north of $325 million, or $802,000/unit. Newmark is representing J.P. Morgan Asset Management and its local partner, Samuels & Associates.

The apartments are 95% occupied. The property, called Fenway Triangle, includes 42,000 square feet of fully leased retail space and a 423-space garage.

The record price for a Boston apartment trade was set in 2017 when New York-based Clarion Partners acquired the 346-unit Watermark Seaport, at 85 Seaport Boulevard, from a Skanska USA partnership for $239.8 million, or $693,000/unit.

That mark was already put in jeopardy by a separate J.P. Morgan listing this year. The investment manager is shopping the leasehold interest in the 465-unit luxury complex at 225 Northern Avenue and One Park Lane, in the Seaport District. That property, listed with JLL, has an estimated value of about $300 million, or $645,000/unit.

On a per-unit basis, four Boston multi-family sales have exceeded Fenway Triangle’s estimated worth of $802,000/unit. The record of $1 million/unit was set in 2015 when Boston-based Rockpoint Group bought the 128-unit property at 100 Arlington Street from a Congress Group partnership for $128 million.

Fenway Triangle opened in 2006. Its apartments range from studios to three bedrooms and average 908 sf. The average rent is $3,204, or $4.11/sf. That’s 20% below the average effective rent of competing properties, leaving room to raise rates. The amenities include a fitness center, a courtyard, a game room, a pet-grooming station, lounges and a 24-hour concierge.

The retail tenants include West Elm and Chipotle. The retail leases have a weighted average remaining term of five years.

The complex is less than a mile from Longwood Medical Area, a major academic and cultural hub encompassing Boston Children’s Hospital, Brigham & Women’s Hospital and Harvard Medical School. The property is within walking distance of two MBTA stations.

Multi-family valuations in Boston are being fueled by the combination of strong institutional demand and a relatively small amount of Class-A inventory. The demand has already pushed this year’s sales volume past the $620 million annual record set in 2017, according to Real Estate Alert’s Deal Database, which tracks transactions of $25 million and up.