BREAKING DOWN SALES AT

MILLENNIUM TOWER BOSTONInsights into the value differentiators, sale prices, square foot values, buyers,

financing, & rentals at Boston’s most successful luxury development.

By David Bates, Boston Realtorwww.BatesRealEstateReport.com

Introduction

Dear Boston Real Estate Enthusiast:

I admit, I’m a little in awe of Millennium Tower Boston, its 60 floors, and the 23,000 square feet of amenity space.

And I’m a little amazed by the sales team that sold nearly every residence in the tower in what seemed like less than a nanosecond.

Surely, the Boston condominium market had never seen so many new luxury condominiums sold in such little time. As a Boston Realtor for 20 years – and someone who has spent several years identifying and writing about trends in the market – I feel pretty confident that the Hub will never see it happen again, perfect real estate sales storm or not.

My shock and awe converged with my interest as a broker in understanding value in this market to provoke so many questions about the Millennium Tower Boston sales. To answer them, I reviewed the first 425 sales in the tower, scoured the MLS rental listings, reviewed LINK BOSTON reports, and visited the tower at what seemed like every phase of construction. Throughout, I spoke to several Millennium Partner employees and executives.

I put together this quick presentation and think it provides some definite insights into the value differentiators, sale prices, square foot values, buying demographics, financing, and rental info in Boston’s most successful luxury development, Millennium Tower Boston.

I hope you like it.

Kindly,

David Bates

Boston Realtor

C: 617-413-6345

What Made It Different

David Bates C: (617)413-6345

Most Boston luxury condo developments are associated with luxury hotel brands.

Boston’s Four Seasons Condominiums

David Bates C: (617)413-6345

The ones that don’t have a luxury hotel associated with the project typically house apartments below.

The Pierce

David Bates C: (617)413-6345

Many Boston luxury developments are of modest size: 100-200 units.

22 Liberty, Seaport, 109 Condominiums

Then there is Millennium Tower…

No Luxury Hotel Affiliation.

No rental apartments below.

442 Residences.

David Bates C: (617)413-6345

23,000 Square Feet of Amenity Space

• 24-hour concierge service

• Valets

• Library

• Game Room

• Fitness center

• Outdoor terrace

• Indoor junior Olympic lap pool

• Club manager

• Private function room

• Treatment rooms

• Kids’ room

• A bar and chef

• La Vie - Programs

• Other amenities

David Bates C: (617)413-6345

Millennium Tower even has a APP.

Or, two apps if you include the Millennium Tower Health and Beauty app.

David Bates C: (617)413-6345

To sell the luxury residences, Millennium Partners sold the building’s differences, the amenity space, and the emerging neighborhood.

David Bates C: (617)413-6345

Most importantly, MTB had about 200 feet of residences that never existed in the city before.

David Bates C: (617)413-6345

Millennium Tower Boston has two lobbies.

One for the City Residences, from the 10th to the 32nd floor.

One for the Grand Residences, 34th floor and above.

David Bates C: (617)413-6345

What the 60-Story Tower Does Not Have…

A 44th floor.

Because the pronunciation of “four” in English is similar to the sound of the word “death” in Cantonese, MTB lost the double death floor.

A Quick Timeline

October 14, 2014 The Millennium Tower Boston sales office opens to the public.

October 22, 2014 34% of the residences had found buyers.

Source: MP Press release

March 12, 201570% of the MTB had sold ($650 million).

Source: MP Press release

September 17, 2015 90% of the project had sold.

Thanks to the velocity of sales, there are no duplexes and there are only a few combined residences at MTB.

David Bates C: (617)413-6345

February 10, 2016MTB’s Grand Penthouse, the most expensive condominium in Boston history, finds a buyer.

Source: MP Press release

Millennium Tower Boston becomes the first building in the U.S. - outside of New York City - to sell one billion dollars of residential real estate.

Source: Richard Baumert, MPDavid Bates C: (617)413-6345

Millennium Tower becomes the most successful building in the history of the city.

David Bates C: (617)413-6345

As you go up in Millennium Tower Boston

As you go up…

The views become more incredible.

THE VIEWS BECOME MORE INCREDIBLE!

David Bates C: (617)413-6345

Hottest View

• MTB’s hottest selling views were toward Boston Common, the Back Bay and The Charles River.

THE HOTTEST VIEWS:The Common, The Charles, Back Bay

David Bates C: (617)413-6345

Ceilings become higher.

20th Floor: 9 ft.

34th Floor: 10 ft.

Penthouses: 12-14 ft.

Source: Conversation with MTB sales representative David Bates C: (617)413-6345

There is more parking attached to the residences.

10th – 22nd: 38% of residences

have parking

23rd – 32nd: 72% of residences

have parking

Grand Residences: 34th and above.

100% have parking

Source: Bates Review of Suffolk Country Registry of Deeds info

46th and above: Residences have 2

parking spaces

10-22nd floor:01,02, 06, 09,10, 11,12,14 do not have parking 03, 04, 05, 07, 08 have parking

23-32nd floor06. 09, 14 do not have parking01, 03, 04, 05, 07, 08, 10, 12 have parking

Cabinets can go from two-tone to white. Counters can go from onyx to marble. Eventually kitchen finishes step up to one of the most famous cabinet makers in the world.

Christopher Peacock kitchen

David Bates C: (617)413-6345

As you go up….

There are fewer residences per floor.

On average, the residences become larger.

The tower is topped off by the largest luxury residence ever built in the city, The Grand Penthouse, which is 12,323 square feet.

Even the floor’s smallest residences become bigger.

David Bates C: (617)413-6345

A review of the first 425 sale prices at Millennium Tower Boston

The least expensive residence in Millennium Tower Boston was unit #1009 which sold for $810,000.

Source: Bates review of Suffolk Registry of Deeds data.

345

The number of million dollar sales Millennium Tower Boston had in 2016

Source: Bates review of LINK BOSTON reports.

239

The number of MLS-LISTED million-dollar condo sales in Back Bay and Beacon Hill combined in 2016.

Source: Bates review of MLSPIN data.

David Bates C: (617)413-6345

The median sale price was $1.755 million.

In 2016, Millennium Tower Boston had a 45% market share of Boston’s $2 million condominium sales.

Source: Bates Review of LINK BOSTON data. David Bates C: (617)413-6345

Only residences on the 32nd floor or above were able to garner sales prices over $3.5 million.

Source: Bates review of Suffolk Registry of Deeds data.

Only residences on the 39th floor and above sold for more than $5 million.

Source: Bates review of Suffolk Registry of Deeds data. David Bates C: (617)413-6345

In 2016, Millennium Tower Boston had more $5 million condominium sales than the entire Boston condominium market had in 2015!

Source: Bates review of LINK Boston reports.David Bates C: (617)413-6345

In 2016, MTB’s Grand Penthouse sold for $35 million, more than twice as much as any Boston condominium ever.

David Bates C: (617)413-6345

Only 27% of the total sales price was financed at MTB. The other 73% of purchase prices were equity.

Source: Bates review of Suffolk Registry of Deeds data.

$961 million in sales.$256 million in financing

More buyers purchased MTB condos without taking mortgages than buyers who

purchased condos with mortgages.

Source: Bates review of Suffolk Registry of Deeds data.

By January 31, 2017, 22 MTB buyers had re-sold, closing for $85,000-$480,000 more than they paid: on average, about 20% more than what they paid.

Yet, through January 31, 2017, no owner above the 42nd floor had re-sold.

Who Were the Buyers…

According to Richard Baumert of MP, the biggest demographic buying in the tower were repeat MP customers, which he estimated purchased 25% of the tower.

Pictured: Millennium Place Boston

David Bates C: (617)413-6345

Who Were the Buyers….

Investors….

A resident of Lexington, MA worked with Chinese investors to purchase 16 residences.

A California brokerage that markets to Asia claimed to have sold another 30 units.

My own review suggested that an extraordinarily high percentage – maybe as much as 90% of residences sized under 821 square feet - – were sold to investors, primarily Asian investors.

Source: Boston Globe 8/30/16 article and Bates scrutiny of Suffolk Registry of Deeds data.

Who Were the Buyers….

Investors….

My own review suggested that an extraordinarily high percentage – maybe as much as 90% of residences sized under 821 square feet - – were sold to investors, primarily Asian investors.

Source: Boston Globe 8/30/16 article and Bates scrutiny of Suffolk Registry of Deeds data.

Some of these MTB buyers might be investors. The list doesn’t include a number of LLC’s that were definitely

investors

Who Were the Buyers

Billionaires and others of means

• John Grayken purchased The Grand Penthouse.

• Michael Dell purchased another penthouse.

About 20% of MTB buyers declared their residence a homestead.

Comparatively, 79% of the buyers at The Seville, an East Boston condominium development, declared their residences a homestead.

Source: Bates review of Suffolk County Registry of Deeds information

David Bates C: (617)413-6345

Price Per Square Foot

MTB sales prices included parking.

MTB per square foot values also include parking.

Most of the residences that sold for under $1,000 per square foot were on the 10th or 11th floor. None were higher than the 16th floor. None had parking.

Source: Bates review of Suffolk County Registry of Deeds data.

$1,048 was the least per square foot paid for a residence that had parking.

David Bates C: (617)413-6345

The median price paid per square foot was $1,348.

Source: Bates review of Suffolk County Registry of Deeds information.

82% of the sales for more than $1500 per square foot were located on the 30th floor or above.

Source: Bates review of Suffolk County Registry of Deeds data.

84% of the $2000+ per square foot sales were at least 40 floors up.

Source: Bates review of Suffolk County Registry of Deeds data.

David Bates C: (617)413-6345

All five penthouses that sold did so for over $2500 per square foot.

Source: Bates review of Suffolk County Registry of Deeds data.

Rentals

David Bates C: (617)413-6345

Through March 3, 2017, more than 100 residences had found tenants.

Source: Bates review of MLSPIN data.

The median rental price was $5,950.

The median rent paid per square foot was $5.20.

Source: Bates review of MLSPIN data.

The Tower’s highest rents went to big residences on high floors, which rented from $13K to $21K a month.

Source: Bates review of MLSPIN data.

The majority of MTB residences received at least $5 per square foot in rent. (63%)

Source: Bates review of MLSPIN data.

A few received $6 per square foot. (13%)

Source: Bates review of MLSPIN data.

To purchase, MTB investors typically paid around 250 times the monthly gross rent.

David Bates C: (617)413-6345