Comparable sales prices for new condominiums were hard to find as developer Lendlease began building its Slip 65 complex on a dilapidated East Boston waterfront parcel. 

So Lendlease released 40 units in a rare silent auction-type sales process in June 2017, and buyers submitted bids ranging from $700 to $1,200 per square foot. The rest of the 80-unit complex sold out in two months at average prices of nearly $900 per square foot, including one unit for $1.4 million. 

“We were confident, but not sure of pricing,” said Nick Iselin, Lendlease’s general manager of Boston development. “Now we’ve set the market.” 

Given the strong response to Slip 65, Lendlease plans to market another 114 units in one of four buildings under construction in the Lewis Street complex as condos beginning next spring, Iselin said. 

Buyers’ enthusiastic response to Slip 65 hasn’t gone unnoticed by multifamily developers, many of whom view East Boston as one of the region’s best untapped condo markets. 

When Brookline-based City Realty agreed to buy a former auto body property on Border Street in 2016, the vast majority of the neighborhood’s development pipeline was rentals, said Clifford Kensington, City Realty’s director of acquisitions. 

“We really saw there was a huge pent-up demand for condos citywide and in East Boston, specifically,” Kensington said. “We saw a chance to zig when everyone else was zagging.” 

The city has approved 37 development projects including more than 2,500 housing units in East Boston since Mayor Marty Walsh took office in 2014, the most of any neighborhood except South Boston. Most of the neighborhood’s large-scale development has been luxury apartment complexes such as Roseland Property Group’s 550-unit Portside at East Pier. The complexes have the selling points of some of the city’s best views and proximity to the MBTA’s Maverick Station, which provides Blue Line service to downtown Boston in two minutes.  

Fast-forward to 2018, and developers’ outlook is changing. More than 400 condo units are proposed, approved or under construction in East Boston, according to Boston Planning and Development Agency data. 

Steve Adams

The New Normal: $500K Condos 

Doug Medvetz is a research scientist-turned-developer who is working on 10 condo developments in Eagle Hill and Maverick Square, from gut rehabs of 19th-century dwellings to new construction. 

His Brookline-based firm, PhD Homes, submitted plans this month to tear down an auto body shop and house at 425 Border St. and build 16 condos ranging from 881 to 1,182 square feet. Asking prices will range from $575,000 to the high $600,000 range, Medvetz said, which reflects the sweet spot for first-time condo buyers in Boston. East Boston is benefiting as condo buyers widen their searches to previously overlooked neighborhoods in search of relative affordability, he said. 

“We’ve seen no issues with offers slowing down,” he said. “Every time stuff comes on the market, within a week or two they’re under agreement, and the city is going to need this type of housing.” 

Condo prices are hitting points needed to support new construction. Year-to-date, median condo sale prices in East Boston have hit $500,000, according to data compiled by The Warren Group, publisher of Banker & Tradesman. 

In partnership with Boston-based Gansett Ventures, City Realty expects to break ground this fall on the $21.5 million project at 301-323 Border St. A 6-story, 75,000-square-foot building with 64 condos will replace an auto body shop. The firm is targeting sale prices in the $700 to $800 per square foot range. 

With most of the prime waterfront sites spoken for, development is moving east along the Border Street corridor toward the Eagle Hill neighborhood. City Realty is eyeing additional acquisitions in the neighborhood, which has numerous commercial properties ripe for redevelopment, Kensington said. 

“There’s still some large industrial parcels and old warehouses where you can get a decent-sized chunk of land to do something substantial,” he said. “When we started this project in 2016, we were pretty far off the beaten path. But the rest of Border Street has caught up.”