A prominent office and retail space in the heart of Portland’s Old Port has been sold for $8 million.
Middle Street Holdings LLC, a group of New York-based investors, bought 178 Middle St., known as the Boyd Block, and Four Canal Plaza. The three adjacent buildings are at the corner of Exchange and Middle streets, according to Dan Greenstein, broker and partner of CBRE |The Boulos Co., which brokered the transaction
The buildings include 47,000 square feet of office space and about 21,000 square feet of retail space, currently occupied by Starbucks, Urban Outfitters, Stonewall Kitchen, Bangor Savings Bank and others.
There are no plans to make any changes to the property; the investors plan to continue operating it as is, Greenstein said. There are two office vacancies: a 4,600-square-foot office space above Urban Outfitters and a 3,600-square-foot space on the third floor, above Starbucks.
The brick Italianate building was erected in 1867, shortly after the great fire of 1866 destroyed this section of the city, according to Jamie Kingman Rice, director of library services with the Maine Historical Society. A fifth floor was added in 1900.
Middle Street Holdings bought the property from Buckstar LLC, which purchased the parcel in 2000 for $4.6 million, according to records in the Portland assessor’s office.
The property was purchased as part of a 1031 tax-deferred exchange. Such transactions allow an investor to sell real estate and defer capital gains if he uses the equity to buy an investment property of the same or greater value.
In this case, the New York-based investors had sold a property in Brooklyn, New York, and had come to Maine to see another property, said Greenstein. But once they saw the Boyd Block and Four Canal Plaza, they made the owners an offer, even though the property was not for sale.
“They fell in love with the real estate and the Old Port area,” said Greenstein.
Retail and commercial spaces in this part of the Old Port are highly coveted and rarely come on the market.
“That area is extremely strong, and properties are snapped up quickly. There’s a lot of interest there,” said Karen Rich, vice president and partner at Cardente Real Estate, which specializes in retail and commercial property. “It’s definitely a seller’s market.”
It hasn’t always been that way. In 2007, the Pavilion nightclub in the ground floor of the building closed and left that 10,000-square-foot space vacant. The space remained empty until 2011, when Urban Outfitters moved in. The arrival of the Philadelphia-based chain, which has 233 locations nationwide, signaled the strength of the Portland market and helped draw others to the area, Greenstein said.
“That in itself was an endorsement of the market for downtown Portland,” Greenstein said. “Downtown Portland has become a very desirable market over the past few years. Some of that has to do with the recovery, but also we’re now known as a destination for cruise ships, restaurants and tourism.”
Jennifer Van Allen can be contacted at 791-6313 or at: