What’s going on at Millennium Tower?
Developer shuffles units to secure $36m mortgage
IT’S ALL A BIT MYSTERIOUS, but a recent real estate transaction at Millennium Tower sheds some light on the financial challenges of catering to the whims of well-to-do condo buyers.
According to records at the Suffolk County Registry of Deeds, 16 units in the ultra-luxury condo building in Downtown Crossing were recently sold for the token price of $10. Ten of the units were located between the 36th and 54th floors; the other six were penthouses at the top of the building.
The condos were sold by a limited liability company controlled by Millennium Partners. The buyer, another limited liability controlled by Millennium Partners, secured a mortgage on the 16 units, raising more than $36 million.
Richard Baumert, a partner at Millennium Partners and one of eight officials listed as a manager for both limited liability companies, said in an email that the transfer was no big deal.
Real estate experts contacted by CommonWealth said they had no first-hand knowledge of the transaction, but speculated that it was all about satisfying the needs of the company’s condo customers.
Most developers erect condo buildings and then sell the units as fast as they can. Millennium follows the same playbook, but it apparently allows some buyers to put their units on hold and complete the purchase at a later date.
Baumert has said all but a handful of Millennium Tower’s 442 condos have been sold, but records at the Registry of Deeds indicate only 398 buyers have been issued deeds. That suggests the other owners placed a hold on their units, presumably with some sort of upfront or ongoing payment, and will take possession at a later date.Some of these on-hold buyers may simply need to move in at a later date, but others may be playing a game of arbitrage – securing the unit now for relatively little money and attempting to sell it later at a profit. Twenty-one condos at Millenium have been resold in less than a year at an average gain of $301,763.
The real estate experts speculated Millennium decided to borrow money against the reserved-but-unsold condos to cover expenses or pay off investors. Once sales on the units close, Millennium will pay off the mortgage and move on to the company’s next project at Winthrop Square.