Eight Portland apartment buildings sold for $7M, One Monument Way sold
Photo / Courtesy of CBRE|The Boulos Co.
One Monument Way in Portland sold for $5.24 million on Sept. 30.
Photo / Courtesy of CBRE|The Boulos Co.
461 Cumberland Ave. in Portland
A mechanism to defer capital gains taxes helped clinch the sale of eight apartment buildings in Portland in a $6.965 million deal and led to the sale of a prominent office and retail building in Monument Square in Portland.
East End Holdings LLC and East End Corp LLC, representing a single owner who is a Portland resident, sold the eight apartment buildings to Congress Street LLC, East End Realty LLC and Brick Light Properties II LLC, commercial real estate investors who have been buying properties in downtown Portland for the past two years, according to Joe Porta of CBRE|The Boulos Co., who brokered the deal with Vince Ciampi. The sale closed Sept. 24.
Porta declined to name the individuals behind the sales.
The properties sold represent 75 fully rented apartment units and are located at at 773 Congress St., 129-131 Park St., 503 Cumberland Ave., 461-463 Cumberland Ave., 55 Ashmont St., 124 Emery St., 221 Woodford St. and 514 Deering Ave.
The buyers are all Bates College graduates and have real estate holdings outside of Maine, Porta said.
The seller, East End Corp LLC, then turned around and bought the retail and office building at One Monument Way in Portland from One Monument Way LLC for $5.24 million, closing Sept. 30. Porta and Greg Boulos, also of CBRE|The Boulos Company, brokered the deal.
The Monument Way building houses more than a dozen offices and retailers, including Longfellow Books on Monument Square.
East End Corp LLC will soon complete the purchase of another commercial building at 500 Forest Ave. in Portland, for $1.275 million, Porta said. And the brokers are in the process of looking for another, smaller property for East End Corp LLC to purchase.
In the end, East End Corp LLC’s purchases will meet or exceed the amount earned on its initial $6.965 million deal. And that means that East End Corp LLC can defer payment on the capital gains taxes on its sale of the apartment buildings, Porta said.
The exchange is allowed under the Internal Revenue Service tax code’s Section 1031, where no gain or loss is recognized on the exchange of property if the property is exchanged for similar property.
“You can defer payment of a capital gain,” Porta said, “and instead utilize that gain when you sell a commercial real estate asset, if you trade into another commercial asset.”
The purchasing group of three holding companies sought the apartment buildings, which were never on the market, as a good investment and a diversified revenue base, Porta said.
He said motivation for the initial sale was due to the seller wanting to move from managing apartments to a more concentrated operation with less intensive day-to-day management and to find a downtown Portland property well-suited for appreciation.
These significant deals speak to trends in the market today, Porta said.
“We’re seeing a lot of demand for investment property. With interest rates as low as they are, money is looking for better returns,” he said. “We’re seeing a lot of people offering large numbers for quality investment properties.”
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