Archstone-Smith

March 16, 2007 by Chinatown Blogger.

Looking for housing in Chinatown? Not a problem if you can pay $7000 a month for a 2 bedroom apartment. You may just have to get a roommate.

I remember 5 years ago when then developer Charles E. Smith came before the public and said that a one-bedroom apartment would rent for $1400-$1600. Times have changed since then. Charles E. Smith is now known as Archstone Smith, a publicly traded company (ST: ASN) with hundreds of developments all over the country.

Now that the new Archstone Smith built on Washington Street is almost completed, apartment listings are available online at archstonesmith.com. Plug in Massachusetts - Boston Commons and give them a move-in date. For me, I selected April 1st as my move-in date for a 2BR. Up pops vacant units priced from $3900-$7000. For the $3900 unit, that translates into $46800 a year and it doesn’t include the amenities fee. I assume parking in their garage is additional also.

The question I ask, how much income per year would one need to make to be able to live at Archstone and still have some left over for food, clothing and retirement? If we are to assume that people should only spend about 30% of their income per year on housing, household income is around $155,000 per year for the $3900 unit. For the $7000 unit, one needs to make about $280,000 per year. These prices are only for the two-bedrooms.

To their credit, Archstone Smith Boston Common is the only major development for rental units built recently, so they can command a higher premium in the market. The only other competitor with similar offerings is the 23-story Metropolitan on Harrison, Nassau and Oak Street. When I was in the market for a rental unit 2 years ago, I called the Metropolitan. The lady told me there were no vacancies and if there were, they were asking $1600 for a one-bedroom. The only unit available was a medical student who was looking for a roommate to share a condo. I took a pass.

With the recent slowdown in the housing sector and problems with the sub-prime mortgage business, how will this affect Archstone? Word on the street is that only half of the Boston Commons building is occupied.

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