| Summary: | Thesis (S.M.)--Massachusetts Institute of Technology, Dept. of Urban Studies and Planning, 2005. === This electronic version was submitted by the student author. The certified thesis is available in the Institute Archives and Special Collections. === Includes bibliographical references (leaves 176-179). === In August 2004, a development proposal titled "Galileo Lofts at MIT: Housing and Urban Park" was submitted to the Cambridge Redevelopment Authority for the provision of new housing and a public park on Parcel 7, in Kendall Square, Cambridge, MA. This study is a feasibility analysis of the development proposal. A market analysis and a marketability study were conducted to determine the appropriateness of the proposal for the East Cambridge, Kendall Square market. Demographic analysis identified two primary submarkets: 1) Cambridge Condo Submarket (i.e. demand for the location); 2) Loft Product Submarket (i.e. demand for the product type). To analyze supply and pricing, transaction data for the sale of condominiums within a one-mile radius of the proposed site, and data for the sale of comparable loft condominiums in the Greater Boston Area, were downloaded. Tests performed include descriptive statistics, regression analysis, and attribution analysis. A capital budget was estimated and a development model created to determine the financial feasibility of the proposal. Results indicated that the demand for residential products in the East Cambridge neighborhood priced for the "entry-level buyer" (i.e. up to $550,000) was not being met by current levels of supply, and it was predicted that demand for products priced at the entry-level would continue. === (cont.) It was also illustrated that demand for "luxury" products does exist in East Cambridge, but that the luxury consumer has demonstrated a preference for properties with high-end amenities and water adjacency. The Feasibility Analysis concluded that the proposed project is not viable in financial terms. It was suggested that the original proposal is not ideally suited to capture the demand in either the entry-level or luxury markets. The primary observations were that the planned residential units are too large to target the entry level buyer, and that the location, lack of amenities and rental townhouses at the ground level are expected to be problematic in the pursuit of the "luxury" buyer. It was recommended that the developers reduce the unit sizes in order to satisfy the requirements of the primary target market and redistribute the affordable rental units within the building to avoid a potential problem with marketability and management. These changes, however, would not be sufficient to turn the proposed Galileo Lofts at MIT into a financially viable project because 40% of the units are required to be affordable, and these units cost $180,000 more to produce than they would generate in sales revenue. Other relief would be needed: some suggestions are given. === by Lea J. Ledohowski and James J. Perrine. === S.M.
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