With one day remaining in its online auction, the leading bid to purchase the iconic Time & Temperature Building in downtown Portland reached $5.25 million Wednesday evening.
The auction, which began Tuesday, is scheduled to run until 1:30 p.m. Thursday, at which point the leading bidder will submit finances for approval to finalize the sale.
Conducted by Fisher Auction Co. of Pompano Beach, Florida, the auction had a minimum starting bid of $2.75 million, far below the building’s previous sale price of $12 million. The bid of $5.25 million around 7:15 p.m. Wednesday surpassed the property’s assessed $4.5 million value for tax purposes, although Matt Cardente of Cardente Real Estate in Portland, the lead broker for the auction, said in September that he expects the building to sell for significantly more than that.
He said Tuesday that the winning bidder’s identity would not be revealed until all of the required paperwork has been completed.
Cardente said the market for commercial real estate in downtown Portland is stronger than it has been in many years. He also noted that the property comes with a 340-space parking garage that generates additional revenue for its owner in addition to lease revenue from tenants.
The 14-story office tower at 477 Congress St., which opened in 1924 as the 12-story Chapman Building, was seized by a collections agency in 2016 following years of neglect and a mass exodus of tenants. Marketing material for the auction says the building is about one-third occupied.
The foreclosure placed the property in the hands of a Maryland-based “special servicer.” Special servicers are responsible for recovering assets on behalf of bondholders who purchased commercial mortgage-backed securities.
The building’s prior owner, a subsidiary of New York City-based Kalmon Dolgin Affiliates, had been negotiating with the special servicer, CWCapital Asset Management of Bethesda, to reduce the principal on the building’s $12 million mortgage.
Those negotiations broke down in April 2016, and CWCapital initiated foreclosure proceedings. CWCapital set up a limited liability company called 477-481 Congress Street Holdings and granted it the right to collect leases and rents. Now, the company is selling the property.
A note from the special servicer to New York-based Trepp indicates that it views the Time & Temperature Building as a likely site for redevelopment. Trepp is a research firm that follows the repayment progress and prospects of loans that have been pooled and sold in pieces, or tranches, to investors in commercial mortgage-backed securities.
According to Trepp, more than one-third of the building’s roughly 100 tenants have leases that are set to expire within the next year. Tenants of the property have said they regard the auction as a positive development for the troubled office building. They hope the buyer will invest in renovations to restore the iconic office property to its former prominence.
In November 2017, Portland Fire Department inspectors found 19 fire safety violations in the Time & Temperature Building during a surprise inspection that was triggered by an anonymous complaint.
Five floors in the building lacked sprinkler systems, and multiple floors did not have hard-wired smoke detectors, according to the inspection report. Inspectors also found multiple expired fire extinguishers, inoperative emergency lighting, missing exit signs, blocked fire exits and other problems.
(Portland Press Herald file photo)