Photo / Courtesy CORE
The buyer is working on getting vacant spaces filled at reduced lease rates.
Updated: October 28, 2024
With acquisition of a Kittery shopping center, top priority is filling vacant storefronts
Photo / Courtesy CORE
The 24,000-square-foot Kittery Shopping Center was acquired as a value-add opportunity.
The recently launched acquisitions division of Portland real estate firm CORE bought the Kittery Shopping Center, at 360 U.S. Route 1, as a value-add opportunity.
The 24,000-square-foot shopping center has six units; three of them are leased. The tenants are national clothing retailers Brooks Brothers and Talbots, along with Sustenance Herbs, a locally based organic pet food store.
“Repositioning this shopping center is an exciting opportunity to continue CORE’s contributions to Kittery’s thriving retail landscape,” said Frank Carr, director of CORE’s brokerage division. “This acquisition represents our commitment to revitalizing key properties across New England, and we look forward to seeing the positive impact this project will have on the local business community.”
The brokerage team, led by Carr, will focus on filling the three vacancies. The spaces range from 2,000 to 4,000 square feet. CORE said it would offer funds to assist tenants in the build-out at the property.
Renovations to the property are underway.
“This project in Kittery is just one example of how we ensure properties reach their full potential,” said Dajana Derman, the firm’s director of operations and management.
Improvements include painting, resurfacing the parking area and upgrading the existing HVAC system to become more energy-efficient.
Founded in 2017, CORE launched its acquisitions division earlier this year, with a mission to reduce the barrier to entry for a wide array of investors looking to diversify their portfolios with commercial real estate.
The division launched a real estate private equity fund in June and raised money primarily from Maine investors, said Josh Soley, CORE’s president.
“We’re out in the market now, looking for value-add properties — retail and industrial assets specifically,” he said. “We want them to have a little hair on them. We want a little construction upside and a little vacancy, things where we can add value.”
The integrated model of brokerage, acquisition and management, he said, allows the company to identify assets, perform improvements in-house and provide management services.
“We reached a size where we think we can add value almost entirely in-house for these properties,” Soley said.
The shopping center, he said, fit the parameters as a distressed property in receivership with Bangor Savings Bank. CORE purchased it directly from the bank for just over $2.4 million.
“We’re looking at Kittery as a town dominated by institutional capital players and out-of-state investors for the last 30 years,” said Soley. “It had a spike in interest in retail properties, and that slowly leveled out. A lot of these retail properties — that used to be conglomerate strip centers and shopping malls and had 100% occupancies — are no longer able to get those same high lease rates.”
The company is working on issues related to deferred maintenance and getting the vacant spaces filled at reduced lease rates.
“We want to make sure we’re priced in a manner to attract local tenants,” he said.
Negotiations are underway with several prospects, including a gym and restaurants, he said.
“We want to pick tenants we think will be successful at the center,” he said.
He added, “Once we have the vacant units filled, the return will be substantial.”
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