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March 21, 2018

'Layered' Foden Road sale ends up win-win for owners

Photo / Maureen Milliken Jason Agren, president of Agren Appliance, stands in front of the property at 35 Foden Road in South Portland. He and John Keith, owner of Bedderrest, in the same building, have formed a commercial condo association in ownership of the property. He also now owns the former Thatcher's restaurant building (rear).

SOUTH PORTLAND — When Bob Foden decided to sell property on Foden Road, Jason Agren, president of Agren Appliance, had a decision to make. He liked being at 35 Foden Road, which he’d been leasing from Foden for nearly two decades.

“It’s a great location,” he said Tuesday.

Agren’s store is 7,000 square feet, the other 20,000 square feet of the building is leased by John Keith, who owned the Bedderrest mattress and furniture store.

Agren had been casually looking for a possible new location before Foden made the decision to sell — the family-owned business owns five of its six locations and he also knew there was a possibility the Foden Road site would be listed.

“I didn’t find anything that was going to replace this location,” he said. He said he has been “very, very successful” at the corner of Foden Road and Western Avenue, near the Maine Mall, but tucked in away from the traffic congestion.

Both Bedderrest and Agren Appliance had been at the site for a long time, but with under-market lease rates and no long-term agreements. The building that once housed Thatcher's restaurant, which closed last spring, is also on the property.

“They were tenants without long-term leases, so were very exposed [with a potential new landord],” said Justin Lamontagne, a partner with NAI The Dunham Group, who represented Agren.

When 35 Foden Road went up for sale, Lamontagne and Greg Hastings, also of NAI Dunham, representing Bedderrest, looked into relocation options.

But neither store owner could find anything that met their needs.

“What it would mean to move their stores, or build out, was a little prohibitive,” Lamontagne said.

So began what Lamontagne describes as “certainly the most layered transaction I’ve ever been involved in.”

Pulling it off

Photo / Maureen Milliken
The Agren Appliance-Bedderrest building, and former Thatcher's, all at 35 Foden Road were recently sold,

The outcome, finalized last month, was a commercial condominium agreement between Agren and Keith. The amount of square footage is split to about 20,000 each, with Agren getting the 10,000-square-foot Thatcher's space and the 2,000-square foot corridor that links it to his store.

In the months between the idea and that outcome, two bankers, three lawyers, an engineer, three brokers and South Portland city officials all worked together to sort out the pieces and make them fit.

The agreement included subdividing 35 and 55 Foden Road — since Foden retained ownership of 55 — and Agren also ended up owning the 10,000-square-foot building that until last year had housed Thatcher’s restaurant.

“It made sense, but it was complicated to pull off,” Lamontagne said.

Foden had to agree to the idea, as did Agren and Keith, he said. Working with broker Jim Harnden, who represented Foden, all three business owners came on board.

“Now we had an understanding of agreement, but it was time to go to work. How do we pull it off?” Lamontagne said.

Attorney Sean Bell represented Agren as it moved forward; Bill Fletcher represented Keith and Jerome Gamache represented Foden.

The deal also needed the agreement of a bank, and both business owners decided to go with the Small Business Administration’s 504 loan program, which helps small businesses with fixed assets get a 10%, fixed-rate loan.

Lamontagne said that while the move to SBA’s program was good for Agren and Keith, it made the transaction more complicated, because of added applications, fees and requirements.

Camden National Bank’s Dean Waterman and Ryan Smith were engaged to help with the financial end.

Shawn Frank, an engineer with Sebago Technics, helped cut 55 Foden from 35 Foden, a plan that had to go before the South Portland Planning Board for approval. The subdivision request was to redraw the property lines between the two lots. The board also had to approve the condominium plan. The subdivision and plan were approved on Jan. 9.

The deal closed on Feb. 15.

Lamontagne said the plan’s success hinged on building a qualified team, all of whom worked together to make it happen.

Agren agreed. “It was quite a process in terms of working with the city and condoing out,” he said.

“The city was great,” he added, noting that city planners helped work out a plan that was amenable to everyone involved. “While it was lengthy, it was fairly smooth.”

Lessons learned

Photo / Maureen Milliken
Foden Road, in South Portland, is in the Maine Mall neighborhood, but is a less dense mix of offices and retail.

Jason Agren’s father started with an appliance service van in 1969. When customers started telling him they also wanted to buy their appliances from him, he opened his first store, in Auburn.

The company, which employs 96, has grown since then, including steady growth over the last 10 years, culminating in its best year ever in 2017, with 33 million in revenue.

He plans to renovate his store, particularly the exterior, bringing it more in line aesthetically with the stores the company owns in Topsham and Auburn, particularly “prettying it up” and adding more windows, though it depends on what the building, built in 1965, would withstand.

He is looking for a tenant for the former Thatcher’s restaurant space, with is listed through NAI The Dunham Group.

His store is connected to the Thatcher’s building by a large corridor that had been used for storage by the restaurant. He has taken that over now.

He envisions the stand-alone one-story building, built in 1968, as office space, rather than another restaurant.

The area, in the shadow of the massive Fairchild Semiconductor property on Western Avenue, and separated from the Maine Mall area by wooded properties that house mostly offices, including WEX and Intermed, is underrated, Agren said.

“The beauty of it is that it’s off the beaten path, but there are a lot of ways to get here,” he said. “There is a lot of activity here.”

Plans also include paving the extensive parking area and new signs.

Agren and Keith are a condo association, sharing expenses and collaborating on things like plowing and other exterior issues. They’ve also agreed to share exterior space for special occasions, like big sales.

Agren says more came out of the agreement than building ownership — he said he didn’t know Keith well before and is glad they were able to get to know each other and work together.

Lamontagne, too, says it was a learning experience.

“It was a lesson to me that if you have creativity and qualified players going forward, no matter how onerous and complicated it looks, you can get it done,” he said.

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