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July 15, 2020

Falmouth Center development moves ahead, but on a smaller scale

Courtesy / Compass Commercial Brokers A rendering of the mixed-use building at 251 U.S. Route 1 in Falmouth approved July 7 by the town planning board.

The big plans that Jonathan Cohen and his development team had for Falmouth Center when they bought the sprawling shopping center and adjacent land in March 2018 were scrapped after colliding with abutter opposition last year, but that doesn’t mean things haven’t been happening at 251 U.S. Route 1.

“Our focus has been on getting [the shopping center] filled, and now it’s full," Cohen said of the two years that have passed since the town didn’t approve rezoning that was needed for the proposed 400,000-square foot mixed-use development to forward.

The new owners inherited 35,000 square feet of vacant space in the 203,637-square-foot shopping center, some of which had been empty for decades. There have been a flurry of recent new leases signed, and once an in-progress contract for 2,500 square feet is finalized, the building will be full.

With that checked off, developers are moving ahead with construction of a four-story retail and office building on the property, which was approved by the town's planning board July 7.

“We really don’t have a grand master plan,” Cohen said this week. “We’re going with what it seems like the market wants.”

Cohen and Portland commercial property owner Joseph Soley bought the Falmouth Center property in March 2018 for $21 million. It includes the shopping center, on 40 acres, and another 28 undeveloped acres. Original plans unveiled in May 2018 were for the several-phase mixed use project, and also 11 state-owned acres to the north. But those plans were scuttled when the town didn't approve zoning that would have allowed two outdoor soccer fields on the site.

Photo / Maureen Milliken
A four-story office and retail building will be built at this spot at Falmouth Center, next to the Bucknam Road entrance. The shopping center is in the background.

Falmouth wants office space

The 24,000-square foot building approved by the planning board last week may seem small compared to original plans, but it's raised a lot of interest.

Cohen, and Steve Baumann, of Compass Commercial Brokers, the property's leasing agent, said businesses are hungry for office space north of Portland.

The new building will have 18,000 square feet of Class A office space on the upper floors and restaurant space on the first floor. Each office floor can accommodate offices of 2,500 to 6,000 square feet. 

Cohen and Baumann said the combination of brand-new space and free parking on-site, as well as the proximity to Exit 10 of Interstate 295 and Falmouth spur of the Maine Turnpike, means the space is already in demand.

Baumann said there has been a lot of interest from potential tenants, both for the restaurant and office space, who were waiting for the town to approve the project. 

Baumann represented Cohen and Soley when they bought the shopping center, and also is the leasing broker on many of the properties along U.S. Route 1 in Falmouth from Martin’s Point to Bucknam Road, including Foreside Place, at 202 Route 1. He said that office space anywhere in town gets snatched up quickly when it becomes available.“It’s not just Falmouth Center,” he said.

Parking on the Portland peninsula adds $7 to $8 a square foot to Class B space that’s already going for $20-24 a square foot, he said. Meanwhile, brand new Class A space in the northern suburbs is $20-22 a square foot with free parking.

His firm, which has a primary office in Portland, has opened a second location, in 2,000 square feet on the second floor of the existing shopping center space. “It will be a model for what our finishes will be like in the new tower,” he said. 

The restaurant space in the new building could be for one restaurant or more than one, and there may also be office tenants on the ground floor. The restaurant space will have a 2,000-square-foot mezzanine, and outdoors patio seating.

The outside dining was part of the plan before the COVID-19 pandemic, Baumann said. Restaurants, as well as customers like the space, which adds interest to a property. One of the long-term effects of the pandemic will be that space like that will continue to be in demand, Baumann said.

The new construction, designed by Archetype Architects, of Portland, is expected to be completed by the second quarter next year.

Courtesy / Compass Commercial Brokers
Interior second floor office space at Falmouth Center, some of it vacant for decades, has been renovated for tenants, including the property manager Commercial Properties Management.

Long-needed upgrades

While the new building was in the works, the old building, constructed in 1960, was getting some long-needed attention.

About 50,000 square feet of the shopping center had been vacant for years. Shaw’s moved from the north end to space left vacant by Ames department store in the south end in 2005, leaving its former north end space empty. In 2016, Lamey Wellehan shoe store moved across the street, leaving more empty space.

When Cohen and Soley bought the the property, Ocean State Job Lots and Planet Fitness had just moved in, but there was still 35,000 square feet of empty space in the shopping center.

The project is one of many for Cohen, who developed the 86,000-square-foot WEX headquarters in Portland, which opened last year and is developing the 275,000-square-feet 100 Fore St. mixed-use project across the street, among other projects. But Falmouth Center is a project close to home. He moved to the town in 1998.

"I can not remember the center being full, and now the center's full," he said. Previous owners lived out of state and didn't do much to upgrade the space or entice tenants.

Cohen and Baumann, also a Falmouth resident, said that on-site property management, combined with local ownership, is a major factor in the center's turnaround. Commercial Properties Management, which manages the property, has moved from Milk Street in Portland to completely renovated space above Goodwill that had been empty for decades.

"I go by there two, three times every day," Cohen said. "We're meticulous and we care."

Some changes are obvious — the landscaping has been changed to match what the town has done along Route 1, including flowers and native grasses. Much of the exterior has gotten face lifts, as well as many of the interiors. One he has yet to make is to change out the old Falmouth Shopping Center signs with new Falmouth Center ones. "There are a lot of signs to change," he said, with a laugh.

But much of what’s been done is the kind of thing a shopper won’t see, but means a lot to tenants or potential tenants. That includes not only onsite management, but an overhaul of the HVAC system, some of which dated back to 1960.

Cohen said that when infrastructure is aging or inefficient, “no one is benefiting.” Investing in that type of thing means new tenants want to sign on, and old ones want to stay.

Photo / Maureen Milliken
New tenants Foreside Nutrition and Maine Custom Kitchens have signed leases for long-empty space at the north end of Falmouth Center, left.

New tenants, end-to-end

The newest tenants are Maine Custom Kitchens and Foreside Nutrition, which each just leased 1,034 square feet in the north end. The space was subdivided from the long-vacant Lamey Wellehan space.

“We had to break it up,” Baumann said of the space. Not only was it old and hadn’t been upgraded, but smaller space is in demand now in shopping centers. While tenants are still going for separate pad space of 5,000 to 10,000 square feet, those who are in the “inline” part of a center don’t want that much.

Foreside Nutrition is a second location for Port City Nutrition, which opened at 333 Clark's Pond Parkway in South Portland, which Baumann and Cohen own. Even though the smoothie and tea shop opened in South Portland as the pandemic was hitting, “They’re just killing it,” Baumann said.

Maine Custom Kitchens is moving from Clark’s Pond, because they needed more space, Coco Cheveaux Salon is moving into the vacated South Portland space.

Also in the long-vacant section, doggie day care business Salty Dog Adventures, which moved in last year, earlier this year renewed its lease and expanded from 5,600 square feet to 7,481 square feet in the south end of the center.

At the other end of the shopping center, The Soggy Dog, a dog-grooming shop in the north end, also renewed its lease earlier this year, and expanded from 1,895 square feet to 2,610 square feet.

Space at the south end that most recently housed Lotus Chinese Restaurant is also being split up for tenants that are under contract, but who haven’t been made public yet. Once that 2,500 square feet is occupied, the mall will be fully leased. Other leases this year are Edward Jones, which leased 1,320 square feet and Great Clips, which leased 1,323 square feet.

Last year, Foreside House of Pizza opened in renovated space that previously housed Falmouth House of Pizza; Group Dynamics leased 3,297 square feet; HOP Nails renewed its lease; and New Portland Publishing, which publishes the Portland Phoenix, leased 1,160 square feet.

Photo / Compass Commercial Brokers
A variety of tenants have recently signed office and retail leases at the south end of Falmouth Center.

'COVID changed a lot of things'

Anchored by Shaw’s Supermarket and Ocean State Job Lots, which moved in shortly before the center was sold two years ago, the shopping center also includes tenants as diverse as Sullivan Tire, furniture store Dwellings, Elizabeth Moss Galleries, Book Review bookstore, Planet Fitness, a dentist office, and more.

When Cohen presented the Falmouth Center redevelopment proposal two years ago, he seeking rezoning for a section of the northern part of the lot zoned business/professional, asking it match the village center zoning of the rest of the property, and also requesting some tweaks to the village center zoning.

The fact the zoning change wasn't approved didn't keep things from happening at Falmouth Center, and neither has the pandemic.

"COVID changed a lot of things," Cohen said, particularly in the office space market. While big projects like the WEX headquarters and 100 Fore St. are geared toward luring millenials and the high-tech culture; many of those looking at office space now are concerned about saving money, ease of the commute and are looking for much smaller spaces.

"They want to be close enough to do what they need to do in Portland," he said, but also to be able to jump on the highway and get home. Falmouth Center, only one or two traffic lights from the interstate, "is a pretty great location for that," Cohen said. It's the first new development in downtown Falmouth in years.

Despite the economic downturn from the pandemic, Baumann has signed more than a dozen deals in the past few months. He said that as businesses return to offices, they want less open space and more small, individual space, as well as parking that's not expensive. Restaurants looking for space want to be able to have outdoor dining and space to manage distancing. 

Cohen said there's a lot of room to do something with the 28 acres at the north end of the property and it's a great location, but zoning remains an issue. 

Baumann said one good possibility for the undeveloped land would be a boutique hotel, something the area needs, but it would require rezoning. He said, too, that as real estate needs and attitudes evolve with the pandemic, things in Falmouth Center may, too, though. "COVID could open some eyes."

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