Public documents reveal that the buyer of Portland’s iconic but troubled Time & Temperature Building is connected to a local developer based in Falmouth.
A quitclaim deed dated Dec. 12 lists the buyer as TT Maine Venture LLC of Delaware, and an accompanying document from the state Department of Environmental Protection names Falmouth developer Chris Rhoades as a partner in the venture. Rhoades is the same developer who is converting the former Navy housing at Brunswick Landing into a residential development.
Rhoades declined to comment Friday on the Time & Temperature Building sale.
The 14-story office tower at 477 Congress St., which opened in 1924 as the 12-story Chapman Building, was seized by a collections agency in 2016 after years of neglect and a mass exodus of tenants. It was then sold at auction to TT Maine Venture on Oct. 11 for $9.3 million.
The auction also included three adjacent properties including a parking garage. The properties’ total assessed value for tax purposes is $8.5 million. Marketing materials for the auction stated that the multi-tenant office building was about 38 percent occupied at the time of the sale.
In June 2017, Rhoades and a business partner purchased hundreds of units of former military housing in Brunswick and Topsham for the purpose of converting them into private housing. The sale involved 407 housing units, 334 at the former Navy base in Brunswick and 73 in Topsham.
The partners said they plan to renovate the homes and apartments, and could build up to 200 units of additional housing.
Rhoades and business partner Andrew Preston partnered on the sale with The Presidium Group, a Dallas-based real estate company that owns thousands of rental units in Texas and Oklahoma. The Brunswick properties were bought under the company Brunswick Landing Venture LLC, and the Topsham units were purchased under a company called Patriot Brunswick Holdings LLC.
Rhoades has declined to reveal the Brunswick and Topsham deal’s price, but a mortgage agreement filed with Cumberland County shows Brunswick Landing Venture borrowed $32.9 million for the sale. The overall price is likely to be considerably more.
Sale documents for the Time & Temperature Building indicate that The Presidium Group is involved in that purchase, as well. The quitclaim deed lists the mailing address of TT Maine Venture as 3100 McKinnon St., Suite 250, in Dallas – the address of The Presidium Group.
October’s auction for the Time & Temperature Building was conducted by Fisher Auction Co. of Pompano Beach, Florida. The auction had a minimum starting bid of $2.75 million, far below the building’s previous sale price of $12 million.
According to research analyst Sean Barrie of New York-based Trepp Inc., the Portland office building’s previous mortgage had been sold as an investment to a group of bondholders. Trepp is a research firm that follows the repayment progress and prospects of loans that have been pooled together and sold in pieces, or tranches, to investors in commercial mortgage-backed securities.
The building’s foreclosure in 2016 placed it in the hands of a Maryland-based “special servicer.” Special servicers are responsible for recovering assets on behalf of the bondholders.
The building’s prior owner, a subsidiary of New York City-based Kalmon Dolgin Affiliates LLC, had been negotiating with the special servicer, CWCapital Asset Management of Bethesda, Maryland, to reduce the principal on the building’s $12 million mortgage.
Those negotiations broke down in April 2016, and CWCapital initiated foreclosure proceedings. CWCapital set up a limited liability company called 477-481 Congress Street Holdings LLC and granted it the right to collect lease and rent payments. After more than two years of continued neglect, tenant departures and uncertainty about the building’s future, CWCapital finally sold the property at auction in October.
Barrie said the mortgage investors were forced to absorb a loss of over $4 million on the sale after paying the auctioneer and other fees.
“Although bondholders of the backing (commercial mortgage-backed securities) deal will take a bath, that loss is substantially less than anticipated,” he said.
According to Trepp, more than one-third of the office building’s roughly 100 tenants have leases that are set to expire within the next year. It’s unknown whether Rhoades and his partners intend to empty the building of tenants before renovating or converting it to another use such as condominiums.
J. Craig Anderson can be contacted at 791-6390 or at:
Twitter: @jcraiganderson
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