Chunk of Portland's Old Port to be auctioned in September
PORTLAND — A valuable piece of real estate in the heart of the Old Port is going on the auction block next month, putting in play a stretch of buildings known for its nightclubs and bars.
The six century-old buildings are on two blocks on Fore and Wharf streets. Businesses currently calling the properties home include Fore Play, a sports bar; The Blazin’ Ace, a shop that sells glass pipes; Gorgeous Gelato; Pearl Lounge, another bar; and the Buck’s Naked BBQ, The Merry Table and 51 Wharf restaurants on Wharf Street.
The buildings – at 432, 434, 436 and 446 Fore St., and 42 and 50 Wharf St. – contain roughly 49,600 square feet of leasable space, according to Cardente Real Estate, the agency marketing the properties.
The owner of the properties is BACM 2007-3 Wharf Street LLC, an investment bank that purchased them at a foreclosure auction in 2011 for $5.9 million, according to media reports. The properties have a total current assessed value of nearly $4.4 million, according to the city's tax assessor database.
"This is an extremely rare opportunity to buy some of the best positioned commercial real estate Portland has to offer," Michael Cardente, a broker and partner at Cardente Real Estate, said in a statement. "Since their construction, these buildings have played a major role in defining the Old Port, an area that has national recognition for its restaurants and boutiques."
The real estate is well positioned, but it hasn't necessarily played an important part in defining the Old Port, according to Tim Soley, president of East Brown Cow Management, the Portland developer building the Hyatt Place hotel on Fore Street, across the street from these properties.
"The opportunity is to improve those buildings and have quality tenants and quality space, which they haven’t had the opportunity to display over the last generation," Soley said on Friday. He added that a new owner is "naturally going to be moving toward more productive tenants."
However, given his ongoing projects, Soley said he's unlikely to bid on the properties himself.
"As an Old Port developer and a member of the Portland community, I'm very excited and hopefully someone has a vision to improve them," Soley said.
One of the likely bidders will be J.B. Brown & Sons, the Portland real estate developer building the new Courtyard by Marriott hotel on Commercial Street. J.B. Brown & Sons was involved in the 2011 auction, and will likely bid on them again, according to Chief Executive Officer Vin Veroneau.
"We're evaluating the properties again," Veroneau said. "We'll tour them, and will likely participate in the bidding."
The problem with the buildings, however, is that they've been owned by absentee landlords for so long that the deferred maintenance costs are likely significant, Veroneau said.
"The current uses of the properties are incredibly hard on the buildings and infrastructure, so you need to buy them at a price where you can make significant investments to upgrade the quality of the properties," he said.
"These types of properties need local ownership and investment and care. Real estate by nature is a depreciating asset, so you have to spend money to keep it relevant."
Cardente said the sale has already received a significant amount of interest.
"We've had people fly in from different parts of the country to view the property," Cardente said, adding that the interest is split about equally between local and out-of-state parties. "I think the word is catching that Portland is a good place to invest."
The properties will be sold in an online auction beginning Sept. 23, and ending two days later. The opening bid will be $2 million, Cardente said.