Courtesy / SVN The Masiello Group
Over 60,000 square feet of space is available at the plaza. The search is on for national, regional and local tenants.
July 21, 2021
NH buyer hopes to bring new life to Millinocket mall
Courtesy / SVN The Masiello Group
Northern Plaza, a shopping mall in Millinocket, sold for $1.6 million to a New Hampshire investor who views Millinocket as a community on the rise.
A good deal of storefront is vacant at Northern Plaza, a shopping mall in Millinocket.
But a Hollis, N.H., investor sees that as an opportunity to fill the space with national, regional and local retailers in a town he believes is on the rise.
Real estate investment company Northeast Living LLC bought Northern Plaza, at 800 Central St., from JLP LLC for $1.6 million. Brian Dano and Chris Pascucci of SVN The Masiello Group and Ryan Carey of Maine Realty Advisors facilitated the transaction.
The buyer has plans to bring new businesses to the retail center and SVN The Masiello Group is leading the search for tenants, according to a news release Tuesday.
The 82,505-square-foot shopping plaza, on 7.26 acres, is home to Tractor Supply Co., Dollar Tree and House of Pizza. Creative Options, a shared living service provider headquartered in Bangor, also has offices there.
But the plaza has nine retail spaces to fill.
The seller is based outside of Maine and owned the plaza for about a decade, said Carey.
“He had a good run with the property” and was ready to sell, he said.
The property was on the market for four or five months and received a ton of interest from private equity groups throughout the U.S., he said.
“We were surprised because we thought we’d have a local buyer, someone from north of Bangor,” he said.
The eventual buyer was the most nearby of the queries.
Nationwide search
Northeast Living LLC is owned by Uri Peer, a principal system engineer at Raytheon Missiles & Defense in Hollis, according to his Linkedin profile.
Peer approached SVN The Masiello Group looking for a multifamily investment property.
Because of the high demand and short supply of housing in the New Hampshire and Maine markets, SVN sales leads Pascucci and Dano recommended that Peer switch property classes and instead search for retail properties.
"Retail property was not something I had considered before working with SVN The Masiello Group, but the suggestion of Millinocket was a great fit from a business perspective," Peer said in the release. "Help from Chris and Brian was essential to the deal, and I look forward to working with SVN moving forward to bring this property to its fullest potential.”
Pascucci and Dano tapped the SVN network and expanded the search nationwide to identify properties that would deliver a significant return on investment.
1031 exchange
Dano, who is based in the brokerage firm’s Bedford, N.H., office, told Mainebiz the purchase of the plaza was the second half of a 1031 exchange after Peer sold a 10-unit multifamily property in New Hampshire.
The 1031, or “like-kind,” real estate exchange is a tax benefit named after its IRS section code that allows an investor to put off capital gains tax from a sale by investing the money into a similar property.
Although searching nationwide, Dano said he and Pascucci focused on New England properties that might have some upside.
With two national tenants — Dollar Tree and Tractor Supply — and the chance to lease the rest of the space and revitalize the mall, Northern Plaza emerged as the leading investment opportunity with the most upside, he said.
Dollar Tree doesn’t plan to extend its lease, which ends next March, said Dano. With the Dollar Tree vacancy, the plaza has 60,667 square feet of retail space available.
Dano is taking the lead on talking with national companies. He said his colleague Jessica Wiltbank, with Better Homes and Gardens Real Estate The Masiello Group in Bangor, is focusing on regional and local businesses.
“We have a two-pronged approach,” he said.
Renovations
Peer plans to invest another $500,000 in a new roof and electrical system, said Dano.
Discussions are also in the works to redo the parking lot. Once the vacancies are filled, next steps could include doing a general facelift for the plaza, he added.
Peer is willing to make spaces fit tenants’ needs, he said, but in general the structures are in good shape.
Attractive investment market
Once a thriving paper mill town, Millinocket faced difficult economic times when the Great Northern Paper mill closed in 2008. In recent years, the town has worked to reinvent the community as a recreation hub and gateway to attractions such as Mount Katahdin, North Woods and Allagash Wilderness Waterway.
On its website, the town of Millinocket also bills itself as business- and industry-friendly.
And the former mill site’s new owner, the nonprofit Our Katahdin, has invested more than $8 million in infrastructure redevelopment and recently signed a 99-year lease with its first tenant, California-based data center Nautilus Data Technologies, for a $300 million build-out on 13 acres of the 1,400-acre property.
Those factors make the town an attractive market for investment, according to Dano.
“We are very bullish on the Millinocket market,” he said.
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