Blog :: 03-2021

Off Market & Private Listings

Traditionally, real estate listings are immediately placed in the multiple listing service (MLS) with photos, a description of the property, HOA fees, floor plans, pricing and other items that are relevant to a possible buyer. This allows the listing to be shared with the broadest possible audience of buyers, and buyer agents. 

Recently, and especially over the last year with the COVID pandemic, off market and private listings have become much more prevalent. For obvious reasons, sellers didn’t want strangers coming into their homes. Instead, the property is quietly marketed through the listing agent’s network of fellow agents, client list, and sphere of influence.  An experienced agent may belong to professional networking group(s).

Besides the changes made due to COVID, the ultra-luxury market is rife with “whisper” listings. Buyers in this category want what others can’t have. It’s exclusive and confidential and they want what their friends can’t get. For the seller, it provides privacy. They don’t want their homes published in MLS, and then propagated to Zillow and countless other public websites.

Case in point, Tom Brady and Gisele Bundchen’s Brookline compound recently traded in an exclusive off market transaction (the sale price was kept private, but many speculate it was over $30M). The property had previously been listed on MLS with another agent for several months without finding a buyer. The power couple hired a new broker who deployed the “off market” strategy to selling their house.

My past four sales have all been private deals, priced from $705,000 to $8,450,000. I’ll be curious to see if this trend continues as we start to get more vaccines rolled out and life returns to something more normal for all of us.

 

 

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Re-Setting the Table

Spring is upon us! Hibernation is over and Boston & Cambridge restaurants are waking up from a lengthy period of deep sleep and take-out. This is great news for restaurateurs, diners, tourists and landlords alike!
 

Here are some restaurants Boston.com highlighted as re-opening in March:

Burro Bar     -     Brookline & South End

City Bar     -     Back Bay

Coppersmiths     -     Southie

Dorchester Brewing Co.     -     Dorchester

Galway House     -     Jamaica Plain

Oak & Rowan     -     Fort Point
 


In a recent article, Terrence Doyle of bostoneater.com recommended these new eateries debuting this Spring:

Cicada Coffee Bar - Vietnamese coffee shop with zen garden.  Cambridge

Cloud & Spirits - Koren-inspired New American.  Cambridge

Mida - house made pasta.  South End & Newton

Wood Fired Love - wood-fired pizza.  Mission Hill

Punch Bowl - contemporary New England fare.  Brookline
 

In anticipation of Summer, I suggest:

Jaho Ice Creme - Japanese style soft serve.  Back Bay, Chinatown & South End

New City Microcreamery - unique flavors made with liquid nitrogen.  Cambridge 

Taiyaki - Japanese waffle treat.  Seaport

Honeycomb Creamery - ice creme tacos.  Cambridge

Milk Bar - signature cereal milk soft serve.  Cambridge

 

 

What is a Cap Rate?

One commonly used metric for evaluating investment property is the capitalization rate, or cap rate.  Overly simplified, it’s what your annual rate of return would be if you purchased a property with all cash (no mortgage).  Put another way, the cap rate is what investors are willing to pay for a dollar of net operating income (NOI).  It is calculated as follows:
 

Cap Rate  =     Net Operating Income   
                   Purchase Price


The main value of a cap rate analysis is its ease and simplicity.  By knowing or estimating the annual rents and expenses, and considering the asking price, you can quickly gauge the “asking” cap rate. 

Market cap rates vary significantly by property type (e.g. multifamily/residential, retail, office, etc.), by location and other factors (e.g. creditworthiness of tenants, length of leases that are in place, etc.).

Other important considerations:

  • Consider whether you are (or should be) evaluating the current/in-place net operating income or the projected net operating income.  If the property is under-rented/substantially vacant, then looking at just the current cap rate may not provide a reliable assessment.
     
  • Consider what expenses you are including, and excluding, in your calculation of net operating income.  This will have a direct impact on the cap rate analysis.  For instance, if you are analyzing a property that shows no property management fee in their operating statement but you are planning to hire a property management company, then that needs to be factored into your analysis.


If you have questions about buying or selling investment property in or around Boston, please contact us.  We are also happy to share recent market reports with cap rate trends.