August 6, 2018
J.B. Brown & Sons’ purchase of 80 Exchange St. in Bangor for $3.5 million signals the Portland commercial real estate and asset management firm’s confidence in the city as a growing market, according to the agent who brokered the deal.
According to a news release from CBRE | The Boulos Co., the sale involved one of the most visible office structures in Bangor. The 88,478-square-foot, six-story Class A office building, on 1.2 acres, was built in 1973 and renovated in 2007. With its height and central location, 80 Exchange St. offers 360-degree views of downtown Bangor, the Kenduskeag Stream and the Penobscot River.
J.B. Brown & Sons bought the building from Dead River 80 Exchange LLC, in a transaction that was finalized in January. The sale was not announced until late July for business reasons, said Charles Day of CBRE | The Boulos Co., who represented the seller.
Evolving office market
According to the City of Bangor Assessing Department, the purchase price was $3.5 million. The asking price was $5 million. The property went on the market in early 2017.
“We had it on the market for a lengthy period of time,” said Day. “The office market in Bangor seems to be evolving. It’s starting to come back a little bit.”
The sellers had occupied two floors of the building, but decided to sell the building when the company downsized and vacated one floor, said Day. The Boeing Co. also had a full floor but vacated last year.
“It made sense to put it for sale,” he said. “We had lot of local interest. But they couldn’t get to the price we needed.”
The building now has 2 1/2 floors available for lease. The building is anchored by the law firm Eaton Peabody. Camden National Bank occupies the first floor and Dead River Co. occupies one floor. Eastern Maine Psychiatry & Behavioral Health also has a small suite.
“The attraction for J.B. Brown is that it’s a core asset that’s in great condition with very little renovation needed,” said Day. “We should be able to make it attractive for potential tenants.”
Day, who grew up in Bangor, said the main takeaway behind the purchase is that this is one of the first big purchases from a Portland investor in Bangor.
Usually Bangor goes to Portland
“It’s usually the opposite way around,” Day said. “It’s usually the Bangor people going down to Portland.”
He cited development on the Bangor waterfront, including the significant investment that Bangor Savings Bank is making on the waterfront, the resurgence of the downtown and the conversion of older buildings into apartments as indicators of the city’s surging real estate market.
“There’s some real energy there right now,” Day said. “So it’s significant that someone like J.B. Brown, which has been around for 200 years, sees some value there. That’s the message I want to get out — that you have someone that’s not in the local market who’s bullish on Bangor.”
Vin Veroneau, president of J.B. Brown & Sons, said the property came to J.B. Brown’s attention when it was looking for a replacement property as part of a 1031 exchange.
“We were searching for a signature building,” said Veroneau.
Under IRS rules, a 1031 exchange allows a taxpayer to defer capital gains by exchanging similar, qualifying types of property
Bangor is the farthest afield J.B. Brown has invested. Other assets are primarily in Greater Portland and Lewiston/Auburn.
“We thought this asset offered the best value and upside potential for the company,” said Veroneau. “We’re excited to see the growth and investment in downtown Bangor. There’s been a fair amount of investment in infrastructure by the city of Bangor in sidewalks and streets. We’ve seen small businesses opening there — breweries, restaurants and coffee shops. And we’ve seen additional residential growth in the downtown market. We see that as positive growth, similar to what we’ve experienced in Portland.”
The building is in good shape, but will get some updating.
“We’ll update the lobby and common areas and make some changes to the outside plaza area in the near future, just to freshen it up,” Veroneau said.
That additional investment could amount to about half a million dollars, he said. The plan is to upgrade the lobby and common areas over the next few months, and the plaza later this fall or the spring of 2019.
About 30% of the building — about 27,300 square feet — is available for lease. CBRE | The Boulos Co. has started to market the vacant office space.
J.B. Brown will keep its eye on continued investment in the Bangor market, Veroneau said.
“We’ll become more familiar with the market over the next year or two with this asset,” he said, adding that he travels to Bangor once a month on business.
Day said he’s also marketing 1 Merchant’s Plaza in Bangor, a six-story, 55,028-square-foot office building on 0.8 acre, built in 1973. The asking price is $2.75 million. Occupants include the Bangor Publishing Co., the environmental consulting firm Woodard & Curran, financial advisor Edward Troscianiec, Verso Corp. and UBS Financial.
“We’ve had it on the market a little while,” he said. “A lot of these buildings have been owned by the same owners for 10, 20 years, and this is the first time they’ve been for sale. I think a lot of people are seeing a strong seller’s market and want to take advantage of that.”
By Laurie Schreiber
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