South Portland shopping plaza sold to seller of One Monument Way for $4M
Courtesy / NAI The Dunham Group
740 Broadway in South Portland
Courtesy / NAI The Dunham Group
740 Broadway in South Portland
The seller of One Monument Way in Portland has bought a shopping plaza in South Portland in a deal that allows the corporation to defer capital gains taxes on the sale.
The group, 740 Broadway LLC, is utilizing Section 1031 of the Internal Revenue Service tax code, which allows sellers of some properties to defer payment on capital gains taxes if a property is exchanged for a similar property, called like-kind exchanges.
“The use of Section 1031 seems to be happening fairly often these days to exchange properties and minimize income taxes,” Paragon Commercial Real Estate’s Mike Anderson, the broker for the buyer of the South Portland property at 740 Broadway, told Mainebiz.
The buyer, 740 Broadway LLC, is owned by residents of the greater Portland region, Anderson said. He said the group views the property as an investment that requires less management than the Monument Way building, which houses more than a dozen offices and retailers, including Longfellow Books.
The buyer of One Monument Way, East End Corp LLC, had purchased the downtown Portland building for $5.24 million on Sept. 30 after selling eight Portland apartment buildings for $7 million, also utilizing Section 1031 of the IRS tax code.
The retail center at 740 Broadway, by contrast, comprises two, single-story buildings that are strictly retail. It sold for $4 million in a deal that closed Oct. 1. Tom Moulton and Katie Millett from NAI The Dunham Group brokered the deal on behalf of the seller.
“This simplifies things for them,” Anderson said of the owners of 740 Broadway LLC. “There’s still management to be done at 740 Broadway, but it will be less demanding.”
Current tenants are a mix of local businesses and chains, including include Tuxedo Broadway, Supercuts, Nail Co., Tropical Smoothie, CB Wireless, Greener Postures Yoga, So Po Bar & Grill and Nothing Bakes Like a Parrot. There is currently a small vacancy of 1,400 square feet.
The seller of the South Portland plaza, J & J Co., LLC is a local investment group that owned the property since 2007, when it redeveloped the former Cap'n Newick's restaurant site to build the 21,957-square-foot retail center.
The seven-year-old buildings will not undergo any material changes as a result of the sale, Anderson said.
“It services that side of South Portland very well,” he said. “It’s a highly visible property.”
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