🔒Banks retool real estate portfolios with acquisitions, sales, new builds

A number of banks across Maine, looking to right-size their footprint and leverage market opportunities, have been retooling their real estate portfolios, with properties bought and sold along with renovations and new construction.

HQ expansion

Kennebec Savings Bank is planning construction of a five-story building at its 150 State St. main office campus in Augusta. The goal is to design a campus that functions better for customers and employees, improves safety and traffic flow, and fits the character of the neighborhood.

“As we continue to grow, it’s important that our facilities evolve in ways that enhance the customer experience, support our employees and strengthen our connection to Augusta,” says Andrew Silsby, the bank’s president and CEO. The campus is the site of the bank’s headquarters and one of its branches, located in a historic building called the Tappan-Viles Mansion, designed by noted Maine architect John Calvin Stevens and listed on the National Register of Historic Places in 1982. The bank acquired the mansion in 1984 and completed renovations there in 1990, including attaching a new lobby building. “Nothing is changing to this structure, and it remains the corporate headquarters of Kennebec Savings Bank,” says Silsby. The new building and additional parking will be on the same campus. The branch lobby and drive-through currently being used will move to the new building, which will also have offices and meeting space for customer-facing employees.

The project cost hasn’t been finalized yet, but it’s anticipated to be between $14 million and $19 million. The permitting process is well underway. “We’ve been working with the city of Augusta on the approval processes,” says Silsby. “Those continue to move along.” Pending approvals, the goal is to break ground in July and to occupy the building by the end of 2027. The project team includes Auburn architectural firm Platz Associates and Augusta construction firm Lajoie Brothers. The design picks up elements of the Augusta House, an early 20th century hotel that once sat off the nearby Memorial Circle rotary. “I’ve got a couple of bricks from when I was 7 years old and they took that down,” reminisces Silsby. “It was quite iconic here in the city.”

Next-door building

In December, Kennebec Savings bought the former Maine State Grange building, next door at 146 State St. Built in 1790, the building is structurally sound and Silsby says the bank is committed to preserving it. Features include original tin ceilings and the remnants of a carriage house “turntable,” a rotating platform once used to turn horse-drawn carriages and then vehicles.

“When it became more likely that it was going to be sold, we decided to step in and buy it,” says Silsby. “It’s in the city’s historic district. We intend to make sure it continues to be used for some purpose. We’ll determine what that is eventually.” In the short term, the property, which shares a driveway with 150 State St., will help improve traffic flow and parking during the construction of the new building. Another nearby bank-owned property is at 15 Western Ave., which is tucked into a corner of the 150 State St. campus. The bank’s original intent was to tear down the commercial building there, in order to create adequate space for the construction of the new building. Instead, local developer Richard Parkhurst stepped in with a proposal to move the 15 Western Ave. building, which is another John Calvin Stevens design, although not designated a historic structure. The bank owns a vacant lot on Chandler Street, across from the 150 State St. campus, and sold a portion of the lot to Parkhurst to be the new site for the 15 Western Ave. building. “If he can move it and give it a second phase of life, we’re happy to lean in and help,” says Silsby.

First retail branch

Earlier this year, NBT Bank completed the fit-up of a 1,700-square-foot space at 191 Marginal Way in Portland, its first retail branch in Maine. The subsidiary of Norwich, N.Y.-based NBT Bancorp Inc. (Nasdaq: NBTB) has had a commercial lending presence in Portland, at 5 Widgery Wharf, since 2014. But this is the first branch for retail depositors. In addition to teller services, the branch includes a walk-up ATM and night-drop services. The retail branch addresses the growth of NBT’s depositor base and employees in Maine. NBT is constantly reviewing potential office locations, Michael O’Reilly, NBT’s Maine regional president, has said. “In addition to community needs, we analyze several additional factors to assess and prioritize opportunities, including available talent, potential locations and market disruptions.” Fit-out of the NBT branch was done by Southern Maine Remodeling, of Scarborough, and Port City Architecture, of Portland.

Downeast expansion

Last summer, Franklin Savings Bank cut the ribbon on a full-service branch at 181 State St. in Ellsworth. The bank has served the Ellsworth community since 2016, operating as a business lending office at 130 Oak St., Suite 9, next door to the new branch. Looking to enhance its footprint in the Downeast region, the bank expanded services to include consumer and business deposit accounts, mortgage lending and full-service banking. The branch, a multimillion-dollar investment in property acquisition and build-out, is approximately 3,000 square feet and includes 13 parking spaces, lobby and drive-up access, an ATM and a night-drop.

The location was considered a good spot for the branch for several reasons, including ease of access that avoids high-density traffic. It’s also a well-known location due to its proximity to the previous loan production office next door. The project team included contractor E.L. Shea Inc. and Sealander Architects, both of which are based in Ellsworth.

Real estate optimization

Camden National Bank, the principal subsidiary of Camden National Corp. (NASDAQ: CAC), had several significant real estate transactions recently as part of the process to optimize its real estate network to serve Maine and New Hampshire customers. “The good news is, we have plenty of real estate,” says Bill Martel, CTO and executive vice president if technology and support services. “The question is, how do we put that to the highest and best use for our customers?” Camden National sold a 35,234-square-foot office building at 245 Commercial St. in Rockport to the Anchor Church for $2.75 million. The bank sold a 4,408-square-foot retail building at 96 State St. in Augusta to J.R. Jolicoeur LLC for $650,000 and leased 13,500 square feet of space at the 43,405-square-foot Evie Cianchette Block at 1 Market St. in Portland’s Old Port neighborhood.

Changing needs

Camden National closed its branch at 96 State St. in Augusta several years ago, leaving three other branches in Augusta, plus three branches in surrounding towns. “We knew we had more than enough coverage,” Martel says of 96 State St. “But we had kept it on the books and we were able to find a good buyer to move that off the books and, most importantly, take the proceeds and reinvest that into areas where we didn’t have as much service.”

At 245 Commercial St. in Rockport, the bank had an operations center that was a critical hub for years. As for other companies, the pandemic changed the operating model from on-site to hybrid. As the bank grew since then, it’s continually hired people across the state. “Whereas everyone would have, at one point, been co-located centrally, that’s no longer the operating model we’re in,” he says. “So we had a very large building and we had the opportunity to sell that to a growing local church. We’re thrilled it will be used by the community. And that sale allows us to reinvest back into our network.” Reinvestments of the proceeds include new technology and modern designs. That includes a revamp at 89 Elm St. in Camden, leased in 2024, half a mile from the bank’s headquarters at 2 Elm St. Used as an operations and innovation center where the bank’s technology teams work on the digital platforms, investments included refinishing as a modern, open concept.

Investments were also made into the headquarters at 2 Elm St. Renovations are complete on the second floor and the basement floor. A refresh of the branch location on the first floor is expected to begin this year.

Room for growth

In Portland, Camden National was “bursting at the seams” at its 2 Canal Plaza banking center, says Martel. The bank leased a larger, 13,500-square-foot space a few blocks to the east at 1 Market St., performed renovations and recently completed the move. “We loved the location and the visibility,” Martel says. “The size was perfect. There’s room for everything, from operational teams to executive offices to meeting space. The meeting space is very nice for us to be able to bring in clients.”

  Upgrades are an ongoing discussion at the bank. “Every year we invest in at least some of those locations,” says Martel. “We’ve refurbished branches in Bath, Brunswick, Brewer, Gardiner, Augusta and Belfast in the past couple of years. We’ll continue to do that.”