Here is the latest installment of Bates By the Numbers, a weekly feature by broker David Bates that drills down into the Hub's housing market to uncover those trends you would not otherwise see. This week, David tackles the whats and wherefores of assessments. (Last week, he looked at condo fees for two-bedrooms in Back Bay.)
The word "assessment" can strike fear into the hearts of the bravest condominium buyers. Perhaps the following assessments are the reason why.
In 2006, Brookline's largest condominium complex, the 763-unit Brook House, announced a $38 million assessment. At roughly $50,000 a unit, the assessment amount rivaled (and still does) the median annual household income in the U.S. The funds from the assessment were used to replace the aging fan-coil heating system.
In 2009, a Brookline agent familiar with the Brook House assessment posted that the work of the assessment had been completed for only $23.5 million, which came out to an average of $30,000 a unit—a huge savings and a number that merely rivals Massachusetts' annual income per capita (see previous link).
In 2005, 50-60 Longwood, a Brookline complex with 175 units, passed an assessment that ended up costing owners a total of $28 million—or, $160K a unit, on average. Among other improvements made to the Coolidge Corner luxury buildings, the assessment replaced a cement floor in the garage, replaced the emergency generator, and replaced much of the exterior brick facade. One of the penthouses recently sold in the complex for $1.195 million. Its 1.1981 percent interest in the common areas likely meant the owner had paid in the neighborhood of $335K for the assessment.
Boston's most famously assessed property is Harbor Towers. In the 1990s, Harbor Towers, located on the waterfront, initiated an assessment of approximately $9 million (or $15K a unit on average) to replace more than 1,700 windows and waterproof the buildings at 65 and 85 East India Row. In 2007, another $75 million assessment was necessary to do emergency work to the HVAC systems and corroded pipes. This assessment averaged out to around $120K a unit, an amount which was more than what some owners had paid to buy their condos.
It is important to also note that owners in this coveted property have a penchant for buying adjoining units and combining them. My informal review of public records found more than 75 owners who appeared to own between two and four units of the 624 units available at Harbor Towers. As a result of this unusual practice, perhaps no one in the city has paid a larger assessment than the owner of 85 East India Row, Unit 40A-B-C-D, who in all likelihood absorbed an assessment in excess of $500K. Fortunately, this owner recently sold the units for $2.525 million.
· Our Bates By the Numbers archive [Curbed Boston]