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Updated: January 21, 2022

Equity from apartment refinancing provides capital to buy turnkey Portland inn

Courtesy / West End Inn Two partners purchased the West End Inn, at 146 Pine St. in Portland, as a turnkey investment.
By Laurie Schreiber

A boomerang Mainer and his partner found themselves with some equity after refinancing apartment properties and decided to invest in an 1870s-era inn in the heart of Portland's West End neighborhood.

Through limited liability corporation, 146 Pine LLC, they bought the West End Inn at 146 Pine St. from Port Westy LLC for $1.515 million. 

The buyers were Stephen Simonds and Ronald Chiu. 

Dana Moos of Swan Agency Real Estate and Alyssa Bouthot of Portside Real Estate Group brokered the deal.

The 6-room inn is a brick-faced townhouse-style building designed by Portland architect John Calvin Stevens and constructed in 1871.

It was a private residence until 1984, when it was converted to a bed-and-breakfast. Portland’s West End includes residential neighborhoods with brick-lined streets and historic architecture. 

living room with fireplace
Courtesy / West End Inn
The West End Inn, built in 1871, features high ceilings, floor-to-ceiling windows and crown moldings.

The inn received the TripAdvisor Traveler’s Choice Award in 2021.

Historic features include crown moldings, 12-foot ceilings, and floor-to-ceiling and arched windows.

Off-market deal

The seller was Diana Pace, who paid $1.2 million for the inn in 2019. 

Pace came to the property after a career in the field of marketing, advertising and brand-building for software and information technology companies, she told Mainebiz at the time. She updated the site with new furnishings, paint, wallpaper, bedding and amenities, with the goal of having a “modern vibe” that still fit with the vintage building.

As part of that, she also installed an automated wine bar, similar to a vending machine.

For the recent sale, buyers Simonds and Chiu made the transaction off-market. 

The Realtor, Moos, said she always had her eye out on Pace’s behalf for real estate opportunities. She got to talking with Alyssa Bouthot, who had her eye out for acquisition opportunities on behalf of Simonds and Chiu. 

Simonds and Chiu wanted to buy and Pace was willing to sell.

“The West End Inn is an absolutely beautiful property,” Pace said in an email forwarded by Moos. “But it needed some design and marketing attention when purchased in March of 2019. After 2.5 years of working to build up the business, drawing an expanded clientele and maintaining a consistent full house, it just felt like the right time when the opportunity came to sell to Stephen.”

She added, “And he's a great guy. I'm confident he'll continue to provide exceptional service for his guests!”

A way back to Maine 

Simonds grew up in Saco and has spent most of the last decade in New York City, where he worked in marketing for a start-up software company. His title before he left was head of demand generation. “I was always looking for a way to get back to Maine,” he said.

While he was in New York, he and Chiu had been investing in apartment buildings in Maine. In general, the partners take the conservative approach of buying turnkey apartments, being good landlords, and increasing rents only after an apartment turns over.

“We’re in it for the long game,” he said.

In 2020, he returned to his home state.

“It was an easy choice, as everyone went remote,” he said. “I had made the decision to eventually leave my job in order to buy a business up here. I decided to join the Great Resignation, leave my job and do something local.”

The two partners found themselves with some equity, thanks to the rise in real estate values. But they didn’t want to park the money in more apartment buildings, in case the market faltered.

“We said, ‘Let’s look into buying an existing business,’” he recalled.

They consulted with some banks to see what kind of businesses could be most easily financed. 

They were advised that hospitality businesses were a good option because most of the value of the business is tied to the real estate. 

They contacted Bouthot — a serendipitous connection, it turned out, because Simonds and Bouthot had gone to the same high school, although a year apart.

“When I asked Alyssa and said, ‘This is what we’re interested in doing,’ she immediately reached out to the Swan Group,’” he said. “That’s how we came to the West End Inn.”

Financing was arranged through the U.S. Small Business Administration 504 program, which provides loans to borrowers for certain commercial purposes in combination with a regular bank loan. In this case, the partners went to Machias Savings Bank. 

Simonds credited Pace for doing a great job with renovations.

“I can’t speak highly enough of Diane. She really did a great job, not just with the improvements and renovations that she did on the inn, but also she found really great employees,” he said.

wine bottles in machine
Courtesy / West End Inn
The previous owner installed an automated wine bar.

The employees decided to stay on under the new ownership, he said. 

“I’ll be on the property a few times a week and as needed,” he said. “But the real face of the property will continue to be the current innkeeper, Milan Barlov. He’s been the innkeeper there about two years. He’s a great employee.”

In addition to Barlov, the staff includes a housekeeper. Simonds said he’ll probably add a part-time employee during peak season. The inn is year-round but trade is slow in the winter.

There are no immediate plans for further renovations. 

“My goal for the near future is to take inventory of the wear-and-tear items — all of the linens, the furniture, the flatware — and to replace what needs replacing,” he said. “Then next year during the slow season, after having lived with the property for a year, we’ll figure out what kind of improvements there might be.”

The plan also includes building relationships with local vendors such as craft breweries, nearby restaurants and even a chocolatier. The goal is to offer local products and to build experiential visits for people who stay at the inn. 

Once the deal came together, Simonds resigned from his remote-work position with the New York City software company. He lives near the inn and has already filled in for Barlov occasionally.

“It’s been fun so far,” Simonds said. “The nice thing is that everybody who comes to a place like that is typically on vacation and in a good mood.”

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