A South Portland development creates opportunity in tight industrial market
Photo / Peter Van Allen
David McClees, founder of Talus Corp., acquired 155 Rumery St. in South Portland, which includes two warehouses totaling 52,000 square feet. He plans to add a 24,000-square-foot industrial building on the parcel in the foreground.
SOUTH PORTLAND — The founder and president of a thriving Portland-based business recently made a major industrial real estate investment in expectation of capitalizing on Greater Portland’s tight industrial market.
David McClees is building a 24,000-square-foot building on spec at 155 Rumery St. — a move that has been greeted enthusiastically by people in the market searching for industrial space. Construction is planned to begin in October for completion in spring 2017.
McClees founded Talus Corp. in 1985, a company that develops and wholesales automotive organizers and travel accessories to retailers throughout the nation. It’s growing quickly and providing products to retailers such as Bed Bath & Beyond and AutoZone.
“We fly under the radar but we’ve been expanding nicely,” said McClees.
Talus was first located in the 11,190-square-foot Building No. 4 at 470 Riverside St. in Portland.
In 2013, McClees purchased a 40,000-square-foot industrial building at 299 Presumpscot St., also in Portland, and moved the business there. Talus occupies 25,000 square feet of the building; the other 16,000 square feet is leased out.
He initially leased the Riverside Street building to other users. But earlier this year, a buyer came along, so he sold the building for $840,000. He was represented by Roxane Cole of Roxane Cole Commercial Real Estate in the transaction.
Around the same time, Cole helped him identify an investment property — 155 Rumery St. in South Portland — that allowed him to defer capital gains taxes on the Riverside Street sale through the 1031 tax-deferred exchange rule. The Rumery purchase closed June 29. McClees paid $1.5 million for the property, which comprises 5.33 acres with two existing warehouse buildings totaling 51,840 square feet and a development lot for a build-to-suit industrial building up to 40,000 square feet. The seller was Northeast Distribution Services LLC.
'Ideal logistics'
McClees acquired 155 Rumery St. in recognition of the opportunity to develop the property as prime industrial space for lease. The property is in a great location that is minutes from downtown Portland. It has an active, private rail spur into the adjacent Pan Am rail yard and is directly accessible to all major highways and the Portland International Jetport.
“It’s an ideal logistics location,” McClees said. “There are not many spaces with rail, and it’s close to the port. You can get any place you need to in a hurry. So it’s partly logistics, and also the area might be coming up. We hear mutterings of things happening in South Portland.”
McClees also has thoughts of moving Talus to the new location.
“But as of now, no,” he said.
Three years ago, when he was looking for new space for Talus, he realized the industrial market was tight in Greater Portland.
“It took a long time to find industrial space that was decent,” before finding the Presumpscot Street property, he said. “It’s tough to get these days. That’s my impression.”
So he sees the Rumery Street property as having great potential. Plans include upgrades to the two existing buildings.
“The former owners did a nice job of upgrading the buildings, but I’m going take it further,” he said.
McClees said he also expects to add an additional 18,000 square feet in the future. Investment is expected to be between $60,000 and $100,000 for building upgrades, and in the $1.2 million to $1.5 million range for the new building.
McClees’ interest in industrial real estate stems from his ownership of properties in Baltimore that were developed decades ago by his father, a commercial appraiser.
“My dad dragged me and my brother around industrial property growing up, so this is like old home week for me,” he laughed.
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