COURTESY / THE DUNHAM GROUP
The Class A office complex provides space flexibility depending on tenant needs.
Updated: February 7, 2022
Medical office building in Bangor snapped up off-market in bid for stable value
COURTESY / THE DUNHAM GROUP
1 Cumberland Place in Bangor was redeveloped from a former freight terminal in 1989.
A 40,200-square-foot office building in Bangor was scooped up by a New Hampshire investor in an off-market play for a stable return on investment.
MRM Bangor LLC bought 1 Cumberland Place from One Cumberland Place LLC for $4.05 million.
TC Haffenreffer and Sylas Hatch from the Dunham Group brokered the sale.
“We have one small vacancy left, but I’m sure it will fill up quickly,” said Haffenreffer who, with Hatch, worked with both buyer and seller on the deal.
Tenants include Robinson Insurance and Financial, Creative Imaging Group, Bangor Children’s Dentistry, Cumberland Title, Northern Light Health Foundation as well as others.
Haffenreffer said Bangor’s downtown is seeing an uptick in investors, likely due to tight markets in Greater Portland.
“The two-hour drive is worth it to investors,” he said.
The building
The Class A office building, built in 1947, was a former Fox & Ginn Movers Inc. freight terminal. At one time, it was little more than a concrete block building with a loading dock, storage and garage bays.
In 1988, it was bought by Richard Cattelle, a New Jersey native who studied mechanical engineering at the University of Maine at Orono and became a NASA rocket engineer and flight controller during the Apollo program.
Cattelle later returned to Maine to pursue commercial and investment real estate ventures and other business activities.
In response to demand for Class A office space in Bangor, his development company, Cumberland Partners, redeveloped 1 Cumberland Place, adding a third story and new exterior and reconfiguring the interior as an office complex.
The property is located in downtown Bangor and is less than 2 miles from I-95. The building is ADA accessible and provides access to a shared conference room, central mailroom and 100 surface parking spaces.
Turnover
In early 2020, Cattelle sold the property in an off-market transaction to John Thibodeau for $3.1 million. Thibodeau is a Bangor native who owns a Portland consulting firm called Windsor Associates. Haffenreffer and Hatch brokered that sale as well.
At the time, Thibodeau told Mainebiz he viewed it as a distinct property in the Bangor office market and in Bangor generally, with a great location, plentiful parking and good views.
He noted the building has great bones and is in excellent condition.
At the time, the building was 85% occupied.
Haffenreffer said that, after he acquired the building, Thibodeau secured longer-term leases from existing tenants brought in additional tenants in the health care industry
A good marriage
The property wasn’t on the market. But Haffenreffer was working with another client, Christopher Leahy, who was looking for investment opportunities in medical office buildings that would provide better yields than the Portland market.
“I thought this there would be a good marriage between the two,” Haffenreffer said.
Leahy agreed it was a good opportunity.
“John Thibodeau had leased up he building. He got some really decent tenants in there,” Leahy said. “It should turn a decent profit based on what I paid for it and how much it cost to finance it.”
Leahy has a background in home improvement and construction in New York City, a career he pursued for almost 40 years. He and his wife, Maria Rowena Manalo have also been landlords together since 2001. A couple of years ago, Leahy started concentrating on real estate.
Courtesy / Leahy/Manalo Family
Christopher Leahy and Maria Rowena Manalo.
He and his wife recently moved from New Jersey to Portsmouth, N.H. Their real estate investments — which include other family members and a long-time friend on some deals — include properties in New Hampshire, Massachusetts and several in Portland. In Portland, their holdings include an office building at 482 Congress St., a newly renovated apartment building nearby at 11 Shepley St. and a FedEx cross-docking facility at 236 Presumpscot St.
Leahy said he looked to medical office space for its stable tenancy.
“If your client base is in health care, the revenues are always going to be there to pay your rent,” he said.
He continued, “As a real estate owner, as a landlord, I’m looking more for a return on the investment than I am necessarily for the highest rent possible. It’s all proportionate. You can buy a building in Maine for less than it costs to build a building in Maine. You’re not going to get very high rents, but you’ll get rents that cover the costs of owning a building and return a profit.”
Leahy said the much-speculated death of the office building is greatly exaggerated.
“Nobody wants to go back to the office right now, but that’s temporary,” he predicted.
The purchase of 1 Cumberland Place was financed through cash reserves and a mortgage with Gorham Savings Bank.
Some design plans for the property are on tap, including new signage and a review of décor.
“It could use a freshening up,” he said.
Leahy said he’s also looking into adding electric vehicle charging stations in the parking lot, primarily for tenants and their visitors.
He added, “Real estate investing in Maine, and particularly Bangor, is not about appreciation. It’s more about stability. In Bangor, that particular building is really nice. I like brick and mortar, I like tenants, I like businesses to do well.”
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