The Portland Square office and retail development in downtown Portland has been sold for $66 million in what one of its brokers described as the largest commercial real estate deal in the city’s history.
North River Co., a New York-based commercial real estate development firm and an affiliate of Waterfront Maine, was the buyer of the two mixed-use towers and their parking lots, according to Drew Sigfridson, managing director and partner of Portland-based CBRE | The Boulos Co., which represented North River in the deal. Preti Flaherty represented the buyer as local legal counsel.
Sigfridson said the sale price was the highest Boulos could find on record in Portland.
“We’ve been doing this for 40 years, and we can’t recall a larger deal,” he said.
Sigfridson said the property received multiple bids and was highly desirable because of numerous factors, including its location, quality, size, high rental rates, historically low vacancy and the potential to redevelop a 5-acre surface parking lot with a parking garage and other structures.
Portland Square was built in the late 1980s and is 97 percent leased, according to Boulos. The entire project covers about 7 acres.
One Portland Square, at the corner of Union and Spring streets, is home to the law firm Verrill Dana and to H.M. Payson, an investment company, among other professional offices.
Two Portland Square, which sits at the corner of Union and Fore streets, houses the executive offices of TD Bank and several financial companies including Wells Fargo, Ameriprise and Prudential.
The buildings had been owned by RREEF America, a real estate investment trust company affiliated with Deutsche Bank, for nearly a decade before this purchase and was marketed in the fall of 2014 by an out-of-state brokerage firm. The managing partners of North River – Coleman P. Burke, Christopher Flagg and Christopher Pachios – have strong local ties and own other buildings in Maine, including the Merrill’s Wharf building on Commercial Street and the Fort Andross building in Brunswick.
The operating team for North River will include Mike McDonald, who has managed the property for over 10 years, and Peter Pachios, Anthony Gatti III and Dan Jacques, who also are partners in the transaction.
The sale of the property drew interest from other local real estate investors such as Tim Soley, co-owner of development firm East Brown Cow. In a January interview with the Portland Press Herald, Soley said he was interested in the property, but dropped out of bidding when the price went higher than $62 million.
Sigfridson said the owners are in discussions with potential tenants for an existing, 2,500-square-foot office space and 1,400 square feet of available retail space in Two Portland Square.
Other than some possible building improvements and the possibility of additional development in the future, Sigfridson said tenants and patrons of Portland Square aren’t likely to notice any changes as a result of the new ownership.
“The transition will be seamless to the occupants,” he said.
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