With long-term tenant in place, Lewiston office building secures buyer
Courtesy / The Boulos Co.
Long-time Maine commercial real-estate investors fulfilled a 1031 exchange with the purchase of a well-kept Lewiston office building.
A short-term lease in a portion of a well-kept Lewiston office building made it difficult to successfully market the property at a price acceptable to the seller.
But when Chris Paszyc, a partner and broker at the Boulos Co., secured the state as a long-term tenant earlier this year, the asset became an investment-grade property of interest to a buyer who had a 1031 exchange requirement to fulfill.
JLM Enterprises bought the office building from Rubicon-Lewiston Holdings for $5.3 million.
The building is on a corner and has two addresses: 198-200 Main St. and 3 Lowell St.
Paszyc secured a 15-year lease with the state of Maine to occupy most of the three-story, 65,982-square-foot building, which comes with 12 parking spaces.
Built in 1932, the structure was renovated 2002.
On-again, off-again
The property was originally on the market for sale with the Boulos Co. in 2019.
However, a short-term lease with St. Mary’s, a health system based in Lewiston, in a portion of the building made it made it unattractive to investors.
The property was subsequently taken off the market.
Fast forward to this year, when Paszyc was made aware that the state had an office requirement in Lewiston.
When the state signed a long-term lease, the asset became “an investment-grade property fully occupied and backed by the full faith and credit of the state of Maine,” Paszyc said.
Coincidentally, the buyer had an immediate 1031 exchange requirement at the time. So Paszyc negotiated an off-market deal that both buyer and seller were agreeable to.
The buyers
JLM Enterprises is owned by Joe and Ashley Mannisto, who own other commercial real estate from Nashville, Tenn., to Bangor, but primarily in Maine. Investments include office, industrial and medical properties.
The state leased the building for several agencies, including the Department of Health and Human Services, said Joe Mannisto.
“The building is in excellent shape,” he said.
For the short term, the couple plans to make a few improvements on some of the building’s operational systems.
Future investments will potentially include building a parking structure, he added.
The purchase was financed through a cash payment and a loan with Kennebec Savings Bank.
“They were excellent to work with,” he said.
As is often the case, relationships helped bring about the deal: Mannisto said he’s worked with Paszyc on about a dozen previous transactions and Paszyc brought this one to his attention.
Mannisto’s investment philosophy is straightforward.
“For the most part, we’re buying already tenanted buildings,” he said. “There needs to be a certain return on investment to make sense.”
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