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October 15, 2018

Brunswick multi-unit apartment building snapped up in three days

Courtesy / Rathband Co. at Keller Williams Realty The 21-unit apartment building at 6 Potter St. in Brunswick earned lots of investor attention when it hit the market, due to the town's robust economic development and tightening residential market.

A 21-unit apartment building at 6 Potter St. in Brunswick received considerable interest when it hit the market in late May, with the property going under contract in three days.

Potter St. LLC bought the property from Sebago Rental Properties LLC for $1.775 million. Jed Rathband of the Rathband Co. at Keller Williams Realty represented the seller and John Graham of John Graham Real Estate presented the buyer. The deal closed Sept. 18.

One of the city’s largest apartment buildings, it’s 13,680 square feet on three floors, on a 0.45-acre lot with 21 parking spaces. It’s located across from Bowdoin College and walkable to town amenities.

The seller was an investor who had owned the property for about 13 years and decided the time was right to make a profit, said Rathband.

“Brunswick is experiencing a lot of growth and a lot of investment is happening there,” he said. “So the time was right to sell.”

The building was constructed in 1925 but essentially burned down in the 1980s and underwent a complete rebuild that was completed in 1988, said Rathband.

“It’s in fine shape but it can certainly benefit from some modernizing,” he said of its condition.

Strong demand

Courtesy / Rathband Co. at Keller Williams Realty
Brokers expect investment in 6 Potter St. will yield an excellent return given its location.

Brunswick’s residential market is robust, he said.

“It can be repositioned to be ready for the ‘new’ Brunswick, for the proximity to growth, proximity to the train station, the fact that it adds 21 parking spaces to an area that’s seeing more and more demand for parking,” he said.

Interest came from investors as far away as California and New York, he said.

“Typically, my hope is to find a local investor,” Rathband said.

So why are out-of-staters interested in this market? “Because it’s a really good return and a lot of these people have connections to Maine — they’ve grown up here, or maybe they went to college at Bowdoin,” he said. “Everybody who called from afar had a connection to Maine in one way or another.”

They also understand the return on investment they can achieve in Maine, he said.

“They’re living in other markets that have a much lower return, and they know the environment here and they know the trajectory of increased value,” he said.

The building is fully tenanted.

“It needs some modernization but it’s going to be a very good investment,” said Rathband.

Brunswick's residential market is tightening up given job development at Brunswick Landing and the desirability of being in a walkable downtown, said Rathband.

“There’s just not much being built for new apartments and there’s huge demand,” he said. “Prices are going up. Going forward, anyone who can get their hands on commercial real estate in Brunswick will be doing so.”

The outlying single-family residential market is hot as well, Rathband said.

Buyer representative Graham, who focuses on the multi-unit market from Biddeford to Augusta, said that Portland’s residential multi-unit market is tight, so it’s putting pressure on both Brunswick and Biddeford. That’s pushing both renters and investors out of Portland, and also pushing up rents in Brunswick, where it’s rare to find any building with 21 units, he said.

The Augusta and Lewiston markets are also seeing some, if not as much, increased demand, Graham said.

In Lewiston, he said, “Landlords are putting money into buildings, which is a good sign. And in Biddeford, the prices per units are increasing.”

Most multi-unit investors, he said, are putting money into improvements in order to maximize their return.

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