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Commercial spaces that had seen vacancy rates as high as 75% are now being filled by investors in a portfolio of four buildings and a parking lot in downtown Freeport.
“We have tons of inquiries and interest,” Stephen Goodrich, the lead investor, told Mainebiz. “I think within 12 to 18 months we’ll have it substantially leased.”
Goodrich partnered with Portland real estate broker and Freeport native Josh Soley and Omaha, Neb., resident Dean Hodges on the acquisition of buildings at 6 Mill, 24 Bow, 42 Main and 76 Main streets and a 45-car parking lot at 32 West St. for $7.45 million.
The deal was financed through Androscoggin Bank and personal resources provided by Goodrich and Hodges.
The buildings total 49,086 square feet and include tenancies of national retailers such as Orvis, Polo Ralph Lauren, FjallRaven, Estee Lauder and the Loft.
The seller of the portfolio was a New York family that owned the properties for about 15 years, said Mark Malone of Malone Commercial Brokers, who represented the seller.
Malone previously told Mainebiz that the sale came at a time when Freeport has taken steps to re-envision its downtown in an “experiential live-work-play model” desirable to residents, employees, retailers, restaurants and other businesses.
“Changing national retail trends had left Freeport slightly out of step, and playing catch-up, with other retail markets over the past several years,” Malone said. “Recent announcements and developments have shifted the momentum, however, and Freeport has been quietly gaining lost ground, and fast.”
The shifting momentum, he said, is in part due to the anticipated spring 2023 opening of a new $110 million L.L.Bean headquarters, which will bring approximately 1,000 employees.
Additionally, he noted, the town has embraced a visioning process for its downtown, which resulted in the publication in early 2022 of a new Downtown Vision Plan. Among its goals, the plan promotes increased residential density downtown. Several new housing developments are either in the planning stages or have been built or broken ground.
Long a growing retail destination thanks to L.L.Bean and other national and local outlets, Freeport’s retail sector, like those elsewhere, has declined with the growth of online shopping, a situation exacerbated by the pandemic, Soley said.
“Freeport’s gone through three tremendous market hits –- the 2009 recession, the rise of Amazon and deterioration of retail, then COVID,” said Soley. “Every hit has hurt Freeport’s occupancy and increased vacancies.”
Soley said there’s been a steady decline of leases by local and national retailers over the past decade.
“I think Freeport needs a better mix of retail with more local tenants,” he said.
Although national retailers such as L.L.Bean and Patagonia plus activewear stores such as Eastern Mountain Sports remain strong in Freeport, other national retailers, such as Nike and Calvin Klein, have departed, he said.
That’s left “tremendous vacancy,” Soley said. At 42 Main St., for example, 60% of the space was vacant at the time of acquisition.
The partners are cutting rents by as much as two-thirds in order to stimulate local business attraction.
“We’re getting a lot of interested parties,” said Soley, who is serving as property manager for the portfolio.
He added, “These properties do need some love. We’ll clean up the exterior, maybe renovate spaces for existing tenants.”
Goodrich has been in the payments and technology space for about 30 years.
In the 1980s, he co-founded the payment services company First Merchants Bancard Services in Portland with his brother Jim. They then sold the firm and founded payments processor PowerPay, which became one of Inc. magazine’s “500 fastest growing companies in the U.S.” before selling to EVO Payments International.
In 2014, Goodrich bought Florida-based National Payment Card Association, which he moved to Portland and rebranded as ZipLine, a specialty payments and loyalty company serving the convenience store industry.
In 2020, he sold ZipLine and subsequently took over management of another payments company called EasyPay Solutions, which serves clients in the medical, corporate housing and traditional retail spaces.
EasyPay is headquartered on the Maine Wharf at 72 Commercial St. in Portland.
Over the years, Goodrich, who grew up in Gorham, has also invested in and redeveloped real estate as an avocation.
Acquisitions have included mix-used commercial properties in southern Maine and, in the 2000s, the Portland Public Market building, the 331,000-square-foot Riverdam Millyard in downtown Biddeford, and a 600-acre orange grove in Florida.
In recent years, Goodrich sold the Public Market after converting it to office space and Riverdam after completing some upgrades.
Goodrich said he’s always been interested in properties that might have languished but present "value-add" opportunities.
“We’ve tackled some unique and unusual restoration or redevelopment projects,” he said.
Goodrich said he and Soley, who owns Maine Realty Advisors in Portland, have been friends for a while and had been looking for a chance to work together.
“Once he profiled me in terms of the sorts of projects that were of interest to me, he came upon Freeport and thought this might be a fit,” Goodrich said. “Projects that appeal to me are those that are unique and that represent an opportunity to add value. That’s been an opportunity to be creative with properties that maybe others have overlooked or have struggled to come up with a plan for.”
The Public Market, Maine Wharf and Riverdam fit that bill at the time he acquired them.
“We were creative in coming up with new and relevant concepts,” he said. “Certainly this is a for-profit endeavor. But we’ve tried to be community-conscious in these projects.”
Goodrich said Soley’s familiarity with Freeport was pivotal in the deal.
“Because he grew up in Freeport — his passion for the city and how tuned in he is to what’s going on there — I asked him to be a partner,” Goodrich said.
He continued, “We feel that the city is on the front end of a transition. We’re seeing more prospects inquiring about the spaces, whether they be breweries or health clubs or offices.”
"I’m proud of the fact that we’ve gained a reputation for tackling properties like these. It’s fun and interesting and usually quite rewarding.”