As depicted in the following charts, commercial real estate transaction volume in Barnstable County, MA  increased modestly in 2010 with arms-length transactions outpacing the 2009 level.

In 2009 and 2010 in particular, conveyances involving distressed commercial properties of all forms continued on an upward trend. In 2010, nearly 27% of all transactions were distress conveyances involving commercial real estate assets in virtually every sector and Cape Cod sub region.

Note: Not all properties are conveyed to third parties through the auction process, a factor which has become more apparent in recent quarters.  Typically auctioned properties which are ultimately acquired by the mortgagee such as a bank, private lender or other lien holder at auction are held until they are eventually re-conveyed out of a REO portfolio or privately. A similar scenario may result in the case of a deed in lieu of foreclosure. Consequently, in calculating the transaction volume which is generally based on recorded conveyances, in some cases the data may reflect more than one conveyance for the same asset due the changing status.

WOODS HOLE – In mid December 2009, public service broadcaster WGBH purchased the historic Davis House at 3 Water Street in Woods Hole from fellow nonprofit the Children’s School of Science. The move will enable WCAI to continue its radio operations here, and give new life to the 164-year-old building. The recorded deed indicated a purchase price of $670,000. 

“We’re delighted that this wonderful space we’ve rented for eleven years will now become our permanent home,” said WCAI Station Director and WGBH Radio General Manager John Voci.

Since 1998, WGBH has leased the building for WCAI, the Cape and Islands NPR Station, and its repeater services WNAN and WZAI. All are listener-supported public radio stations serving Cape Cod, Nantucket, Martha’s Vineyard, and the south coast.

The exterior of the Greek Revival structure is in poor condition and in need of substantial repairs. In January WCAI will launch an appeal for public support for a Renovation Fund to help restore the building. Immediate needs include a new roof and windows, and the removal of asbestos siding.

“With WGBH’s involvement and the help of our listeners, WCAI will preserve and protect this prominent town landmark for future generations of Woods Hole residents and visitors,” said Voci.

According to Susan Witzell, Archivist and Assistant Curator of the Woods Hole Museum, The Davis House was built in 1845 for Civil War veteran Captain Thomas G. Davis. At one time the house had a store on the first floor with living quarters above, she said. “It was beautiful.”

“The Davis House sits at the gateway of Woods Hole and helps define the historic character of our village,” said longtime resident Thomas J. Hynes, Jr. “Many of us were concerned that the building might be purchased for its location and then demolished to make way for new construction. We are delighted that the property will remain with our friends at WCAI, who have proven to be good neighbors. I know they will be careful stewards of this classic landmark.” 

WCAI, the Cape and Islands NPR station, is broadcast on 90.1FM, 91.1FM and 94.3FM and WGBH HD3, 89.7 Boston. The station is listener-supported public radio serving Cape Cod, Nantucket, Martha’s Vineyard, and the Southcoast.

WGBH Boston is America’s preeminent public broadcaster, producing such award-winning PBS series as Masterpiece, Antiques Roadshow, Frontline, Nova, American Experience, Arthur, Curious George, and more than a dozen other prime-time, lifestyle, and children’s series and websites.

WGBH Radio serves listeners from Cape Cod to New Hampshire with 89.7 WGBH, Boston’s NPR® Station for News and Culture; 99.5 All Classical; WCAI for Cape Cod and the Islands; WNCK on Nantucket; and the All-Classical WGBH HD channel.

The Falmouth facility, formerly operated under the Uncle Bob’s brand, is located between East Falmouth Highway and Village Common Drive. The property has 79,495 rentable square feet in five two-story buildings. Among the 749 individual storage units, 30,000 square feet comprises climate-controlled space. The facility was originally built as Burlington Self-Storage in 1997 and expanded in 2001.

According to filings at the Barnstable County Registry of Deeds, the property was acquired from Sovran Acquisition LP for $4.6 million. Sovran, a REIT which owns and/or operates over 350 self storage facilities in 24 US States under the trade name Uncle Bob’s Self Storage®, previously acquired the property in 2005 for an indicated purchase price of $7.2 million.

According to David Levenfeld, co-founder and CEO of StorageOp, there were some mitigating circumstances which accounted for the price difference. “The Falmouth facility is a relatively large one and perhaps the occupancy projections adopted in 2005 were aggressive. And like all commercial property sectors, the self-storage sector has taken its share of nicks,” he said.

In addition to rebranding the property to Storage Pros Self Storage, future plans for the Class A Falmouth facility include offering larger spaces of up to 1,000 square feet for local businesses and becoming more involved with the local business community.

The Fairhaven facility contains 41,500 square feet of rentable area in six single-story buildings containing 337 storage units and 24 outdoor parking spaces for rent. The property was also formerly part of the Sovran portfolio and has been rebranded to Storage Pros Self Storage. The new ownership will update the Fairhaven property and convert 6,100 rentable square feet of existing space into climate-controlled space. Budget Truck Rental will also be added.

The recent acquisitions brings StorageOp’s holdings to 13 properties collectively offering 780,000 rentable square feet, 6,800 units and more than 950 outdoor parking spaces for rent in its initial target markets of New England and southeastern Michigan. All 13 properties were acquired within the last 28 months.

The properties will be operated by Storage Pros Management LLC, a wholly owned subsidiary of StorageOp, which also offers third-party self storage property management services.

David Levenfeld, co-founder and CEO of StorageOp, commented, “Once again, our strong investor base and solid financing relationships have allowed us to further implement our acquisitions strategy in New England at a time when the capital markets continue to pose enormous challenges. We intend to continue our disciplined growth strategy within our core markets.”

Edgartown, MA- While most market areas are currently experiencing contraction and increasing distress, commercial property fundamentals in the small Down Island business district in Edgartown on Martha’s Vineyard, MA appear to be as favorable as the refreshing summer winds from nearby Edgartown Harbor.

The sale of three retail condominium units acquired in early June 2009 provides some sense of the prevailing winds. 

The three units are located at 4 & 8 Main Street within the Harborside Inn Condominium. The condominium is located on (Lower) Main Street, between North Water and Dock Streets and next to The Boathouse, a recently completed 10,000 square foot private club at the site of the former Navigator Restaurant. 

The location is the busy hub of the established Edgartown business district, an area which generates consistent pedestrian traffic along the brick paved sidewalks uniformly connecting the many mostly seasonal specialty shops and eateries. In addition to a designated Historic District, much of the neighborhood is within Edgartown’s B-1; Business 1 zoning district.

The ground floor commercial units known as Stores A, B & C feature generous display windows and range from 702 to 1,508 square feet and total 2,864 square feet. The recent $2.4 million total sale price amounts to approximately $838 per square foot of gross unit area or an average of $800,000 per unit. The purchasers were a local couple with several commercial property holdings in the Edgartown core business district.

At the time of the sale the units were reported to be fully leased to Chappy’s and Island Pursuit, two affiliated mens and womens clothing shops. Island Pursuit was established in 1983 and offers a wide assortment of luxury brands including Bugatchi Uomo, LaCoste, Lilly Pulitzer, Reef, Tommy Bahama, and Vineyard Vines. In addition to four Florida stores, the retailer has stores in Chatham, MA, Newport, RI and Nantucket, MA.

This recent conveyance is one of only a handful of mostly off-market commercial property transactions recorded in Edgartown over the past 18 months. According to several local sources, the low transaction activity is primarily a function of the buy and hold mindset of many local investors resulting in a limited array of available investment opportunities.

View along North Water Street in Edgartown.

Despite rental rates in the general range of $35.00 to $70.00 per square foot for retail space in the prime pedestrian areas, vacancies are minimal especially by late Spring or just before at the start of the peak summer season. Most rental requirements are in the range of 700 to 1,500 square feet of net rentable area. Reflective of both the tight supply and the close network of  local merchants, it is not uncommon for landlords to receive inquires from prospective tenants either before a tenant moves out or when the vacating tenant is literally in the process of moving. Reportedly, new occupancies include a combination of new businesses and existing businesses desiring to trade up to superior space.

The recently renovated two level building has 4,560 square feet of GBA and is sited on a .64 acre lot offering a prominent location with multiple curb cuts and excellent signage.

The May 2009 transfer equated to a price of approximately $166 per square foot of GBA. Coastal Community Capital  arranged the financing through the Bank of Cape Cod .

The year round restaurant was built in the early to mid 1930′s as the first Howard Johnson’s  franchise in the US. In the years that followed and until about 2005 the restaurant was the well known Fog Cutter Restaurant.

File Photo: The former Fog Cutter

HARWICHPORT, MA – The former Thompson’s Farm Market in Harwichport, MA changed hands in mid October 2008. According to a filed deed, the purchase price was $2,250,000 and the buyer was Building Down the Road, LLC. In a recent report published in the Cape Cod Chronicle the buyer was indicated to be affiliated with South Harwich based Back Office Associates, an information technology firm specializing in SAP data solutions. This notable piece of Cape Cod commercial real estate was vacant at the time of sale and was previously listed for sale on the open market for approximately two years.

The property is located on the north side of Route 28, across from Saquatucket Harbor and Brax Landing.  The 33,000 square foot building, situated on a 1.92 acre parcel of land, was erected in 1989 originally as Thompson’s Farm Market. The first floor contains approximately 16,500 square feet of retail and merchandise storage space. The layout of the 16,500 square foot second floor includes about one-half office space and a bakery/commissary in the remainder. Following the closing of the independent market, in recent years the ground floor space was occupied by various local retailers and the upper level was utilized as the offices of the Wychmere Harbor Club.

The upscale market was erected by Dr. J. Richard Fennel as a later offshoot to the original Thompson Brothers Clam Bar, a popular Cape Cod eatery formerly located at the end of Snow Inn Road on Wynchmere Harbor. Despite generations of loyal patrons since the 1950′s, the original clam bar closed in about 1996. Although a new Thompson’s was subsequently established at the corner of Bank Street and Route 28, the eatery eventually transitioned and the Thompson Brother’s Clam Bar legacy essentially ended here. Many will also remember Thompson Brothers Clam Bar from the famous “Hey Where Ya Going?” radio jingle found in this YouTube video.

Postcards by Hannau-Robinson, NY, NY; Joseph P. Egan Collection

DENNISPORT, MA – The former Wings property located at 438-444 Route 28 in Dennisport is scheduled to take flight and this time it looks for real.

A.J. Lukes Liquors of Dennisport, with an established liquor store at the nearby Benny’s plaza has put into motion their plan to relocate to the former Wings property. As a key first step, in mid September 2008 Dennis Selectman approved both the change of location request and name change to A.J. Luke’s Super Liquor Store. On October 24, 2008 the company took the next major step and acquired this Cape Cod commercial real estate for $719,000 according to Registry of Deeds filings.

The new location offers 8,300 square feet of building area for the annual all alcohol package store. The building was previously occupied by Wings, a speciality retailer and a Dunkin Donuts. In recent years the property had been vacant and began to reflect the lack of regular maintenance. Following the recent acquistion of this commercial property located directly across from the Dennis Town Hall Annex, the liquor store owners plan to complete the much needed interior and exterior renovations. Reportedly, if all goes according to plan, the actual store relocation is likely to occur in about one year from now.

The Wings property was listed for sale for over three years originally at $1.2 million with reports of firm deals being struck but never making it to the closing table for one reason or another. Following a series of price reductions, the one-story retail property was most recently listed at $895,000 according to veteran Cape Cod broker Bob Winn with Century 21-Professional Realty LLC in Harwichport, MA. 

Regarding the recent sale, Bob Winn commented, “I presented the property to an extremely wide range of prospective users, each with an equally wide range of contemplated uses. I have no doubt A.J. Luke Liquor’s intended plans are among the best I have seen. It’s an excellent use for this property.” Mr. Winn is also impressed by the buyer’s investment and positive outlook for the Cape Cod economy. “I am 100% certain A.J. Luke Liquors will complete a top quality renovation and provide a great enhancement to the the Village of Dennisport. They are a top notch organization,” he said.    

In addition to stores in Harwich and Hyannis, A.J. Luke Liquors has operated the Dennisport store since 2003. It appears the new store location will mesh well with this local family-owned company’s goals and commitment to the Dennisport business community.

“The new A.J. Luke’s Super Liquor Store location provides more visibility along Route 28. This key investment will also enable us to better serve our customers by providing more convenience and a larger selection of merchandise,” said Mr. Luke, President of A.J. Lukes of Dennis, Inc. “Along with storefront and curb cut revisions, we also plan to extensively remodel the inside which will include a large fine wine room. Overall, it is an exciting project for us and the Dennisport community, and we are looking forward to bringing new life to this highly visible property.”

Cape Cod Cooperative Bank Operations Center

HYANNIS, MA – Infor Global Solutions has leased 9,500 square feet of space at the recently completed Cape Cod Cooperative Bank Operations Center in Hyannis.

Infor Global Solutions, formerly Infinium Software, is a technology company with world headquarters in Alpharetta, Georgia. The firm is the third largest provider of business software in the world with approximately $2.2 billion in revenue, more than 70,000 customers globally and 9,000 employees. With direct offices in 125 countries, Infor provides and supports enterprise solution software to businesses ranging from aerospace to shipbuilding with 3,500 product specialists in 35 countries.

Cape Cod Cooperative Bank’s Operations Center is located in Independence Park and has 2,500 square feet of leasable space remaining available.

Cape Cod Cooperative Bank is an independent, mutual community bank with over $586 million in assets. Established in 1921, the Hyannis based bank has branches in Yarmouth Port, East Dennis and West Barnstable, as well as Sandwich, Hyannis and East Harwich.

The Mill Stores warehouse and distribution facility located at 128 Breed’s Hill Road, Hyannis, MA recently changed hands. According to public records, the 27,000SF structure on 4.13 acres conveyed in early July 2008 for $3.7 million to RAM Construction LLC of Bedford, MA. The buyer was reported to be a F.W. Webb Co., a plumbing supply company with locations throughout New England.

The property located in Independence Park, between the Cape Cod Potato Chips plant and Breed’s Hill Condominium, is one of a few high bay and sprinklered facilities of this size on Cape Cod. The property also offers several truck height docks and a large truck parking area.

Those of us who have been here long enough to remember will recall this structure was originally built in 1989 by The Myers Furniture Co. for use as their warehouse and distribution facility.