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V O L . X X V N O. X V J U LY 2 2 , 2 0 1 9 14 R E A L E S TAT E / C O N S T R U C T I O N / D E S I G N J im and Rebecca Henry are on a mission to buy older residential buildings and upgrade them without displacing existing tenants. e Henrys are executives in the software technol- ogy industry. Jim is a native Mainer who pursued his career in Boston. Twenty years ago, he met Rebecca, who worked for the same company. Eventually, they founded Remington Street Properties, a real estate development company. Today, they own residential properties, ranging from large buildings with 20-plus units to one-unit condos, in Maine, Massachusetts and New Hampshire. e couple returned to Maine in recent years, in part because they were attracted to the state's entre- preneurial vibe and wanted to be part of that growth in the field of residential real estate. Over the past year, they've purchased scores of units in numerous buildings in Portland, Augusta and Berwick. One of their recent transactions was in February, when they purchased 19 buildings containing 154 units in Augusta. e century-old buildings are an eclectic blend, ranging from two- and three-family houses to large buildings. In Portland, purchases have included a 10-unit on Congress Street and multiple units in the West End. e properties have varying degrees of "fixer-upper" potential, requiring various levels of further investment beyond purchase. As long- term holds, most are "break even" propositions for the moment but are expected eventually to result in higher rents. Overall, the purchases reflect the couple's excite- ment about Maine's real estate opportunities as the state experiences an entrepreneurial renaissance. "I'm of the opinion that, in real estate, the best time to plant a tree was 20 years ago. e second best time is today," says Jim Henry. "I think, just by nature of the fact that people always need somewhere to live, if you choose the right environment and the right municipal- ity that has the right attitude around growth, livability and sustainability, you'll always have these opportuni- ties. We look for those opportunities." Hitting their stride e Henrys' activities illustrate Maine's strong multi- residential rental market. Market drivers include an overall housing shortage, high rental costs in Portland, and availability of housing stock elsewhere, as inves- tors buy structures in various conditions and fix them up either to sell at a profit or for long-term income streams. "Generally, the market is strong and has become considerably stronger in places like Westbrook and Biddeford, because folks are getting pushed out of Portland," says Vitalius Real Estate Group Principal Brit Vitalius, an expert in the residential real estate sector. "Portland prices are high. But people want to own real estate, so they're going out to other cities that are really hitting their stride." Vitalius says that, while the multi-family mar- ket is strong, sales volume and median sales prices are seeing considerable variability. For example, sales volume in Westbrook increased 40% from 2015 to 2016, declined 12% from 2016 to 2017, and was up 27% from 2017 to 2018. Sales volume in Portland rose 11% from 2017 to 2018 as investors competed for fixer-uppers. "Portland doesn't have many rundown buildings left," says Vitalius. "So folks are looking to do that outside of Portland." Who are the buyers? ere are several types of buyers, says Josh Soley, with Maine Realty Advisors. New investors often look for small multi-families and take one unit for themselves. Experienced investors are building their portfolios or perhaps exchanging smaller properties in order to buy larger ones. Larger portfolios of 50 or more units often attract out-of-state real estate investment firms. Why are they looking in Maine? "Value, quality of life," says Ed Herczeg, with Bean Group Commercial Real Estate. "ey might have family up here. For instance, we just put a building under contract in Bath. e investor has an archi- tectural investment firm in Maryland and sailed a lot of the Maine coastline as a young man, so he has connections and wants to invest in Maine." Herczeg sees a lot of multi-family investment in places like Bath, Brunswick and Waterville. Real estate development by Colby College is the primary draw for residential investors in Waterville, he adds. F I L E P H O T O / T I M G R E E N WAY F O C U S C O N T I N U E D O N PA G E 1 6 » Brit Vitalius of the Vitalius Real Estate Group says the multi-family home market is strong but that many of the properties in Portland have been bought up. Portland prices are high. But people want to own real estate, so they're going out to other cities that are really hitting their stride. — Brit Vitalius Vitalius Real Estate Group S O U R C E : Vitalius Real Estate Group MULTI-FAMILY SALES VOLUME 2017–18 +27% Westbrook +11% Portland MARKET FOR IS RENTALS STRONG Investors are flocking to 'multi-residential' properties B y L a u r i e S c h r e i B e r

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