Two blocks of Portland’s Old Port to go up for auction in September

August 26, 2013 in Articles

Author: Whit Richardson
Publication: Bangor Daily News

PORTLAND, Maine — A valuable piece of real estate in the heart of Portland’s Old Port is going on the auction block next month, putting in play a stretch of buildings known for its nightclubs and bars.

The six century-old buildings are situated on two blocks on Fore and Wharf streets. Businesses currently calling the properties home include Fore Play, a sports bar; The Blazin’ Ace, a shop that sells glass pipes; Gorgeous Gelato; Pearl Lounge, another bar; and restaurants on Wharf Street such as Buck’s Naked BBQ, The Merry Table and 51 Wharf Restaurant.

The buildings — at 432, 434, 436 and 446 Fore St., and 42 and 50 Wharf St. — contain roughly 49,567 square feet of leasable space, according to Cardente Real Estate, the local broker marketing the properties.

The owner of the properties is BACM 2007-3 Wharf Street LLC, an investment bank that purchased them at a foreclosure auction in 2011 for $5.9 million, according to media reports. The properties have a total current assessed value of nearly $4.4 million, according to Portland’s tax assessor database.

“This is an extremely rare opportunity to buy some of the best positioned commercial real estate Portland has to offer,” Michael Cardente, a broker and partner at Cardente Real Estate, said in a statement. “Since their construction, these buildings have played a major role in defining the Old Port, an area that has national recognition for its restaurants and boutiques.”

The real estate is well positioned, but it hasn’t necessarily played an important part in defining the Old Port, according to Tim Soley, president of East Brown Cow Management Inc., the Portland developer building the Hyatt Place hotel on Fore Street, right across the street from these properties.

“The opportunity is to improve those buildings and have quality tenants and quality space, which they haven’t had the opportunity to display over the last generation,” Soley told the Bangor Daily News on Friday. He added that a new owner is “naturally going to be moving toward more productive tenants.”

However, given his ongoing projects, Soley said he’s unlikely to bid on the properties himself.

“As an Old Port developer and a member of the Portland community, I’m very excited and hopefully someone has a vision to improve them,” Soley said.

One of the likely bidders will J.B. Brown & Sons, the Portland real estate developer building the new Courtyard by Marriott hotel on nearby Commercial Street. J.B. Brown & Sons was involved in the 2011 auction, and will likely bid on them again, according to CEO Vin Veroneau.

“We’re evaluating the properties again,” Veroneau told the Bangor Daily News. “We’ll tour them, and will likely participate in the bidding.”

The problem with the buildings, however, is that they’ve been owned by absentee landlords for so long that the deferred maintenance costs are likely significant, Veroneau said.

“The current uses of the properties are incredibly hard on the buildings and infrastructure, so you need to buy them at a price where you can make significant investments to upgrade the quality of the properties,” he said. “These types of properties need local ownership and investment and care. Real estate by nature is a depreciating asset, so you have to spend money to keep it relevant.”

Cardente on Friday said the sale has already received a significant amount of interest.

“We’ve had people fly in from different parts of the country to view the property,” Cardente told the BDN, adding that the interest is about 50-50 between local and out-of-state parties. “I think the word is catching that Portland is a good place to invest.”

The properties will be sold in an online auction beginning Sept. 23, and ending two days later. The opening bid will be $2 million, Cardente said.




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