Courtesy / Porta & Co.
On April 24, East End Corp. purchased, for $12 million, the building the corner of Cumberland Avenue and Preble Street that formerly housed the Portland Public Market.
May 24, 2019
Three deals, two days: $30M of properties sold in Portland
Courtesy / Porta & Co.
Cianchette Family LLC purchased One Monument Way in Portland from East End Corp. for $7.25 million in a transaction that closed on April 23.
A series of three related transactions amounting to $29.85 million was accomplished in Portland over the course of two days.
On April 23, Cianchette Family LLC purchased One Monument Way in Portland from East End Corp. for $7.25 million. Joseph Porta of Porta & Co. brokered the sale of the mixed-use property.
On April 24, East End Corp. turned around and purchased a 55,000-square-foot class A mixed-use office and retail property located at 312-326 Cumberland Ave., 15-19 Preble St., and 32-36 Elm St. in Portland, for $12 million. The seller was 25 Preble Street LLC. Porta represented the buyer and Steve Bauman of Compass Commercial Brokers represented the seller in the deal. Although there are different addresses associated with the property, it’s all one building. Formerly occupied by Portland Public Market, it’s now occupied by EVO Payments International and a small restaurant, said Porta.
Also on April 24, Cianchette Family LLC sold 34 and 41 Hutchins Dr. in Portland for $10.6 million. Cross Realty LLC was the buyer of the 52,644-square-foot office complex of three connected buildings on 6.65 acres and an additional 2.75-acre parcel. Charles Day of Porta & Co. represented the buyer and Joe Malone and Jennifer Small of Malone Commercial Brokers represented the seller in the deal. The property is the headquarters of engineering firm Woodard & Curran Inc.
Off-market deals
The three deals unfolded mostly simultaneously, said Porta.
East End Corp LLC bought One Monument Way, a retail and office building, in September 2015 for $5.24 million. Porta also brokered that deal which was off market at that time as well.
“At the time the property was originally acquired, we had underwriting projections of what we hoped to accomplish” with regard to income for the property, Porta said.
“We achieved a lot of those goals to substantially improve the net operating income,” he said.
East End Corp. wasn’t necessarily looking to sell One Monument Way, and the property was never officially on the market, he said.
But Porta was aware that the Cianchette family was interested in selling its asset at 34 and 41 Hutchins Dr. He also knew the Cianchette family’s motivation to sell would be driven by their options for a 1031 tax exchange.
So Porta approached East End Corp. about selling One Monument Way. The idea was that East End Corp. could realize the value they added to One Monument Way. The Cianchette family, in turn, would be able to defer the capital gains tax on the sale of 34 and 41 Hutchins Dr. by purchasing One Monument Way.
“We seemed to have a potential win-win,” Porta said.
Second 1031 needed
But the deal couldn’t be completed until East End Corp., also, found a 1031 tax exchange property.
“We were aggressively looking for an exchange property” for East End Corp., Porta explained. “We had talked with listing broker Steve Bauman” about the former Portland Public Market building which was converted into class A office space with a long-term lease to a Nasdaq-traded company. “It was an ideal fit," he added.
All of the agreements occurred within a couple of weeks, he said.
“It was perfect, because everything tied together,” Porta said. “Each deal solved the problems of achieving capital objectives, deferring tax gain and hedging risk by having the right cost basis, while at the same time improving the return.”
He added, “In this market it is not uncommon to require three deals in order to make one happen."
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