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Atlantic Federal Credit Union bought a Class A office building of nearly 100,000 square feet at 600 Sable Oaks Drive in South Portland to become its new headquarters.
Atlantic bought the property from Brookwood Sable Oaks Drive LLC for $18.1 million.
Tom Moulton of NAI The Dunham Group represented the buyer and Tony McDonald and Jon Rizzo of The Boulos Co. represented the seller in the deal, which closed Feb. 10.
In 2019, Atlantic and York County Federal Credit Union merged, and they have grown to more than 200 employees. Atlantic purchased the building to support its expansion, according to a news release.
Atlantic Federal Credit Union, a nonprofit financial cooperative, is Maine’s largest credit union, with $749 million in assets and 49,000 members.
“In a short period we have outgrown the footprint of all of our branches,” Atlantic’s CEO, Scott Chretien, said in the release. “Finding a facility that allows our support staff to work in a strong one team environment is a benefit for our members. The location is a central location that meets the needs of our staff from Sanford to Topsham. The building is also a perfect fit because it is fully leased, except for space we will occupy.”
“Having Atlantic as the new owner of 600 Sable Oaks Drive, is the ideal property owner for the current leaseholders,” Moulton said in the release. “As a strong and growing financial institution, Atlantic is a wonderful neighbor to add to the area. And it is a smart investment for Atlantic to make for their membership.”
Built in 1992, the three-story 97,376-square-foot building on 6.25 acres is located in the in the Sable Oaks Executive Park, which is near the Maine Mall and includes the Portland Sheraton at Sable Oaks.
The building was originally entirely leased to shoe manufacturer G.H. Bass Co., a division of Phillips-Van Heusen Co.
Around 2000, said McDonald, the building was acquired by BentleyForbes, a commercial real estate investment company in Los Angeles.
In 2005, Phillips-Van Heusen hired McDonald to sublease its space and reposition the building from a single-tenant headquarters to a multi-tenant office building.
McDonald and Rizzo listed the property for Brookwood last September.
“We had a fair amount of interest,” largely from out-of-state investment firms, McDonald said.
“That’s a big transaction for a lot of the local players, but we had some local interest also. And we had a couple of other owner-users look at it.”
The price reflects Greater Portland’s strong market and historically low vacancy rates, he said.
The per-square-foot price of $181 was a deal compared with new construction costs in the $300 range, he added.
Atlantic knew before the merger was finalized, in April 2019, that it would be looking for a new headquarters, and contacted Moulton in 2018 to help them identify a location that would meet its needs, Chretien told Mainebiz.
Atlantic serves members in Androscoggin, Cumberland, Sagadahoc and York counties and has nine branches in Biddeford, Brunswick, Cumberland, Freeport, Saco, Sanford, South Sanford, Topsham and York. Parameters to the search included finding a central spot for all the locations, making Greater Portland a strong candidate, Chretien said.
Another consideration was Atlantic’s future growth, he said.
About 81,000 square feet of the building is leased to four insurance companies, leaving 16,000 square feet available for Atlantic now. There will be no changes for the current tenants.
But there’s future expansion potential as leases expire, he said.
Atlantic originally looked at leasing the available space, not buying the building.
“We thought a better use of our money would be to purchase the building, use the existing space and, as the leases are due to expire, we can look at what our need are and see whether we want to expand in the building,” he said.
Atlantic also considered building new.
“But we saw that the cost of new construction was on the rise, and finding the right location, which would be off the highway and in a central location between the footprint of Atlantic and York federal credit unions, was a challenge in the Portland market,” he said.
“We looked at a lot of properties, all in that South Portland area,” he added. “We knew quickly that Portland wasn’t going to work for us due to demand and parking challenges.”
Another plus to Sable Oaks, he added, is proximity to I-95 and I-295, making it easy for employees to commute.
“We thought this was a great location,” he said. “We looked at over 20 buildings and visited some multiple times. The purchase option was much more appealing to us.”
Of Atlantic’s 200 employees, about 100 will move from various Atlantic and former York locations into the building within the coming year.
Atlantic is aiming for a June or July move, he added.
The building will serve as the merged companies’ new operations center.
The building is in great shape and there are no plans for renovation, aside from upgrades such as new carpeting and LED lighting.
“We’re working with a design company now to utilize that space as best as possible without renovation,” he said.
Tenants’ lease income is expected to save over $3 million of the credit union members’ money versus leasing similar space, he added.