Courtesy / Maine Realty Advisors
The Cinamon Building is fully tenanted except for one unit on the main floor.
July 28, 2019
Multi-family investors take first plunge into office market
Photo / Peter Van Allen
1 Pleasant St. in Portland’s Old Port sold for $1.95 million in an off-market transaction.
A pair of multi-residential investors view their purchase of an office/retail building in Portland’s Old Port as a great first-time investment in the commercial market.
Jim and Rebecca Henry bought 1 Pleasant St. in Portland from MH & RB LLC for $1.95 million.
The property comprises a 12,500-square-foot office/retail building and a parking lot. The transaction closed June 28.
Josh Soley of Maine Realty Advisors, who represented the buyers, specializes in off-market transactions and this was no different. He approached the seller several years ago.
“What drew me to this property was the location, the views, the on-site parking, the developable lot, and the fact it was on the only five-way intersection on the peninsula,” Soley said. “It being stand-alone only further strengthens its potential upside and therefore value.
Value-add
Soley said the investment is a value-add opportunity. The building is in excellent shape, but the lease rates are significantly under market rate, he said.
“There aren’t many office buildings in Portland with parking and with an elevator,” he said. “So this is really unique.”
Among the tenants are a restaurant called Hi Bombay, a maker of map and nautical chart jewelry and accessories called Chart Metalworks, Knickerbocker Group and All Temp Services.
Upgrades in recent years include new heating, ventilation and air conditioning systems, he said.
Called the Cinamon Building, the historic four-story brick structure is on the edge of the Old Port. The building was not named for the spice but for a family named Cinamon, which owned the building until 1982, according to an obituary for Jacob J. Cinamon on legacy.com.
A Maine Memory Network item dates the structure, as an apartment building, at least back to 1924.
Gordon Holmes, owner of Direct Real Estate, represented MH & RB LLC in the transaction and is a managing member of the LLC, which purchased the building several years ago in an off-market transaction.
Holmes, who has been in the real estate business since 1975, said the LLC owns a number of assets in a number of locations.
“The intent was to operate this asset for five or six years, then liquidate,” he said, adding, “It was a terrific transaction. Jim and Rebecca Henry were great and my relationship with Josh Soley couldn’t have been better. It was one of those special times when everyone pulled together to accomplish a special goal.”
Old Port feel
The Henrys live in South Berwick and operate real estate development company Remington Street Properties. Previous purchases included 154 mostly residential units in 19 buildings in Augusta and multi-family properties in Portland.
They said they’ve long loved the Cinamon Building.
“Even before we got into this industry, I always loved the building,” said Jim Henry. “I love the Old Port, I love the cobblestone and the brick, but I love this building in particular. It’s on the edge of the Old Port, but it’s got the Old Port feel and the view of the water. When Josh came to me about a year ago, there was never a question.”
The building is fully tenanted except for one unit on the main floor, which is now undergoing renovation to replicate the wood floors and beams seen on the other floors.
Condo potential
“They built it with some foresight when they put elevator in,” Henry noted. “The elevator goes to the rooftop, where there’s the ability to put in a condo.”
Rebecca Henry noted it’s one of the few buildings in Portland that can have large signage on the exterior, a feature that’s grandfathered in and provides added value.
The Henrys have retained Maine Realty Advisors to manage the building and draft a renovation plan and budget that will depend on tenant input. The project is refreshing, they said, because the building overall is in good condition.
“The prior owner did a nice job managing and maintaining the building,” said Rebecca Henry.
The couple plans to monetize the parking lot, which has nine spaces, during evening and weekend hours, when tenants are not using them.
Overall, they expect the investment to be a good business move.
“I knew the building and we always had our eye on the Old Port,” said Jim Henry. “We wanted to diversify the business a little bit. We’re healthy on the residential side. This is a good defensive position, if we ever do find ourselves in an economic downturn, which is bound to happen at some point.”
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