Courtesy / TMREN Commercial
The 80,000-square-foot mixed-use building at 9 Park St. in Bath sold for $4.6 million after conversion from institutional space to residential.
December 29, 2017
In Bath, mixed-use building sells for $4.6 million
Courtesy / Bob Smith
9 Park St. in Bath was seller Bob Smith's 70th development project in the area.
Marketing for a 80,000-square-foot mixed-use building at 9 Park St. in Bath generated considerable interest; after a year on the market, it finally sold for $4.6 million.
The property, called Washington at Park due to its location in a residential neighborhood at the corner of Park and Washington streets, was sold to SRMAC Holdings LLC by Kennebec Landing LLC, whose principal is Bob Smith. Ed Herczeg of TMREN Commercial brokered the sale, which closed Oct. 31.
“We had multiple offers throughout that year” that fell through, said Herczeg. Ultimately, the seller received an offer that stuck. The buyers are Maine natives who had sold their gas station and convenience store, Red Roof Sunoco in Leeds, to the Nouria Energy Corp., and were looking for a 1031 exchange. IRS rules allow for an exchange of “like-kind” property, in effect deferring taxes a seller would pay on gains.
Herczeg had handled the sale of the Leeds property, and recommended 9 Park for their exchange. The building comprises 30 apartment units and retail space on the ground floor, currently occupied by a restaurant, an antique shop, and several artist studios open for retail. All of the space is occupied except for 8,000 square feet of office space, which is available for lease.
“They’ll hold it and manage it,” Herczeg said of the buyers.
This is a special property for Bath, with regard to its size and use, he said.
“I don’t think there’s any other apartment building this size, plus commercial spaces, in Bath, so it’s very unusual,” he said. “It was appraised above the $4.6 million purchase price.”
A recent conversion to residential space
The building is in excellent shape thanks to the rehab undertaken by seller Smith since he purchased it in 2013. Smith, who who owned Smithfield Construction in Bath until it closed a decade ago, has been in development work in Bath and the surrounding area for 30 years. The property at 9 Park was his 70th development project. Development work has remained steady through the years, even through the recession.
“You have to be able to buy the properties when they’re kind of downcast, and then we totally redevelop them,” he said. “I increase the value and then I sell it.”
When he bought 9 Park from the city of Bath, the building consisted of offices and classrooms for tenants Mid Coast Medical Group, an affiliate of Mid Coast Hospital in Brunswick, along with the University of Maine and Southern Maine Community College. The building wasn’t in bad shape, but all of the tenants unexpectedly moved to new locations within a year of his purchase.
“When I bought it, I didn’t realize everyone was moving out,” he said.
That left Smith with a big, empty building. Searching for new users, he received permission from the city to convert non-residential space into residential and won a bid with the Navy to develop housing for personnel working at nearby Bath Iron Works.
“I had never done a government contract before,” he said. “It was a little daunting, but we worked it out. We put in 30 furnished apartments in spaces that were UMaine and SMCC classrooms before. The university had some labs in there, so we donated all of the lab equipment to RSU I.”
All together, he invested about $2.5 million in the project, including the purchase price of $799,000.
Smith is currently working on project No. 73 now — a vacant four-story building in Bath that was formerly a medical office building.
“We’ll develop that into eight apartments and two floors for businesses,” he said.
Smith finds many of his projects through word-of-mouth.
“We do a nice job,” he said. “And when we complete a project, I always give the new buyer my business card and say, ‘If you have a problem, call me, we’ll figure it out.’ This is a small town, and you have to do a nice job if you want to keep doing it.”
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