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An investment company that previously had most of its real estate holdings in California has been making a push into the Greater Portland market over the past couple of years.
As part of that mission, the company scooped up two industrial properties in South Portland.
PK Realty Management of South Portland is the company behind both deals.
Under a limited liability corporation, it acquired 1 Lincoln St. in South Portland from Lincoln Street Materials & Packaging LLC for $3.21 million. The property comprises two industrial buildings of 12,000 square feet and 28,500 square feet on 7.9 acres. Tom Dunham and Tom Moulton from NAI The Dunham Group brokered the sale, which closed Aug. 26.
Also under an LLC, it bought 53 Wallace Ave. in South Portland from Wallace 53 LLC for an undisclosed sum. The property comprises a 35,705-square-foot single-tenant industrial building on 2 acres. TC Haffenreffer, Sylas Hatch, Moulton and Katie Millett from NAI The Dunham Group brokered the sale, which closed Aug. 20.Both properties were unlisted, said Moulton, who represented the buyer in both transactions.
“It was real estate matchmaking,” he said.
The seller of 53 Wallace Ave. owned the property for less than a year and leased it to New England Gypsum, a drywall distribution company that expanded from Massachusetts to its first Maine location, he said. That deal was also brokered by NAI The Dunham Group.
PK Realty Management was founded by Maine native Richard Packard, who was born in Norway, Oxford County. Packard has a background as a business and real estate attorney and real estate developer in California, including large-scale development of apartment projects, planned communities and hotels. He founded PK Realty Management to specialize in commercial, industrial and residential space in Greater Portland.
In Maine, Packard’s holdings include 50 Monument Square, a six-story office building built in 1881 in Portland’s financial district. Renovations underway there include putting in residential units.
Last November, he bought 30 acres of prime waterfront property bounded in part by Front and Madison streets and adjacent to Bug Light Park in South Portland.
The property was once home to the New England Shipbuilding Corp., one of 18 builders of World War II Liberty Ships. That was also an unlisted deal, brokered by Moulton and Millett. The property includes five industrial buildings and undeveloped waterfront.
“We’ve sold off a lot of the California holdings and exchanged into Maine,” said Jennifer Packard, Richard Packard’s daughter and a principal of PK Realty Management.
The family bought the 1 Lincoln St. and 53 Wallace Ave. properties for the existing cash flow.
There’s potential for some redevelopment at 1 Lincoln St., Jennifer Packard said.
“That property is quite large and attractive in that it’s situated close the highway and it’s an industrial site,” she said. “There’s a lot of need for industrial properties right now. It also happens to be in an opportunity zone," a federal designation that offers tax breaks.
Tenants include the property’s seller, Lincoln Street Materials & Packaging, a provider of bulk material trucking, bulk material packaging and road salt sales. The company worked out a leaseback there, she said.
The larger building “is a bit of a conundrum,” she said.
“It was built for storing salt, so it’s not insulated and not sprinklered,” she said. “We’re working on figuring out what to do with that building.”
Although redevelopment plans are not firm, “We feel confident it’s a good site,” she added.
No upgrades are planned for 53 Wallace Ave., she said. The property comes with a lease to New England Gypsum.
“The property has just been upgraded and fixed up,” she said. “A new curb cut was put in for larger trucks bringing dry wall in and out. There’s a great need for industrial buildings in the area so we see that as a smart investment. New England Gypsum is the type of business that’s stable.”
Packard credited Moulton for identifying properties of interest.
“Every building we’ve looked at has come through Tom,” she said. “I have a fascination with real estate so I’ll go down that black hole. It’s good to know what’s on the market.”
The family is working on a redevelopment plan for the Liberty Shipyard.
“We had a lot of homework to do,” she said. “Right now the most important piece is getting an in-depth understanding of the traffic situation in and around South Portland so we know what impacts our development might have. We’re taking it really slowly.”
Redevelopment work at 50 Monument Square is ongoing, she added. Two stories were vacant at the time of purchase, and a third story subsequently became vacant. Redevelopment includes building 21 residential units on those three floors, mostly one-bedrooms, a couple of studios and a couple of two-bedrooms. The goal is to complete construction by the end of this year, she said. Tenants on the other floors include Maine Community Foundation, Portland Symphony Orchestra, Portland Ovations and FedEx.