Abigail Henderson / December 4, 2019
PORTLAND, December 4, 2019—The Boulos Company has completed a series of interdependent transactions involving three Maine firms and a Boston-based developer: the sale of 43 Northport Drive in North Deering; the sale of the iconic Galt Block at the corner of Commercial Street and Franklin; and the latter’s subsequent leasing.
The Galt Block and adjacent parking lot have been owned and occupied by Auto Europe, the global leader in international car rentals, since 1994. When Auto Europe acquired the 38K square-foot, five-story building it was mostly derelict and located at the edge of a gritty industrial area. More recently, the multi-story configuration and cost of downtown parking for 250+ employees had made the building less suitable. Auto Europe was looking for a single-story location with free parking and access to public transportation.
The Boulos Company Senior Partner Tony McDonald, CCIM, SIOR has a longstanding relationship with Auto Europe. He originally helped them move to Portland from Camden in 1991, and eventually helped them acquire and renovate the Galt Block. McDonald approached another client who owned the ideal one-story building in Portland’s Northport Business Park. At first, that client wasn’t interested in selling, but several months later selling became an attractive option. Auto Europe executives agreed that 43 Northport was ideal for their needs, and McDonald arranged a transaction that allowed them to take over the facility complete with furniture and fixtures.
To acquire its new home, Auto Europe wanted to sell the Galt Block building and use proceeds from that sale under a tax-deferred exchange, following Section 1031 of the IRS code. McDonald brought the Galt Block to market in spring 2019 and received several offers, the winner from a group led by New England developer Ara Aftandilian (AC Hotel, Twenty Thames), who had no definitive plans for the property.
Meanwhile, Drew Sigfridson, SIOR, Managing Director at The Boulos Company, had been working with Certify, a software firm offering travel, invoice, and expense report management solutions. The growing Portland firm had expanded to multiple locations throughout the city and was hoping to find a consolidated home downtown, in a building with character that supported their employee-focused vibe, and offered visibility to assist in recruiting. The Galt Block was a perfect fit.
To qualify this transaction as a Section 1031 Tax Deferred Exchange, the involved parties came together in a simultaneous closing. Auto Europe sold the Galt Block property to Aftandilian for $10.5 million, with $4.15 million of the proceeds going directly to the owner of the Northport facility. These proceeds allowed Auto Europe to acquire the building under the exchange requirements. At that same time, the Certify long-term lease became effective with a planned move-in date in 2020. Auto Europe will relocate to the Northport building in February 2020.
“Businesses like these are helping to grow and strengthen the Portland and Maine economies,” said McDonald. “It’s very rewarding when a complex deal like this falls seamlessly into place.”