Student Housing: Bayside Village looks for a turnaround
By Whit Richardson for Mainebiz
Bayside Village, the 100-unit student housing project on Marginal Way, is gaining a footing after a judge this summer took control of the property out of its original developer’s hands.
A judge in June appointed Boulos Property Management, a subsidiary of CBRE/The Boulos Co., as receiver of the property, as requested by KeyBank, which in late May filed a lawsuit claiming the property’s owner, Rockport-based Realty Resources, had defaulted on its $20 million loan. KeyBank claimed the building was 60% vacant and requested Boulos be named the receiver to protect the value of the property. “It is critical that the property have stable management over the upcoming months during the period that students and their parents will be making decisions about housing for the upcoming school year,” Natalia Herald, a vice president at KeyBank, said in an affidavit.
Morris Fisher, president of CBRE/The Boulos Co., confirmed his company is now in charge of the property and has been marketing it to prospective student tenants.
Fisher wouldn’t share Bayside Village’s current vacancy rate – “that’s between us and the bank” – but said it has improved from the 60% vacancy rate cited by KeyBank.
At the time of the lawsuit, property taxes had not been paid on the property. Last week, however, someone paid $160,798.85 in property taxes, according to the city’s treasury division. Bayside Village Student Housing LLC is “not in good standing” with the Secretary of State’s Office for not paying to file an annual report, according to the state office.
Joseph Cloutier, owner of Realty Resources, did not return phone calls seeking comment.
A major turnaround for the property came just before the court proceedings when, upon KeyBank’s insistence, professional student housing management company American Campus Communities was brought in to manage the building, according to Fisher. “There’s certain things you do when you run a student housing project and once those aspects of the project were clearly identified and implemented it turned around what was before – from what I understand – a fairly chaotic atmosphere and brought some real structure, and it’s important to have that,” Fisher says. “You can imagine having hundreds of kids living down there … it’s a very active population.”
However, the project is not totally out of the woods yet. “We’ve made a lot of progress,” Fisher says. “It’s going to take time to build. I don’t think the project ever found its footing previously. But as students see it’s a nice place to live, it will continue to be considered as an option by the local student population.”
KeyBank said in its initial lawsuit that it could pursue a foreclosure on the property, but as of now the bank has not pursued that route. In fact, since the court appointed Boulos as receiver of the property, KeyBank has not asked the court to do anything else, according to Kurt Olafsen, attorney for Bayside Village Student Housing LLC in the receivership process. Olafsen believes this new status quo will go on for a while.
Greg Mitchell, Portland’s economic development director, says the project is in a “holding pattern,” but that the city is very interested in staying abreast of the situation. “The city remains committed to supporting revitalization of Bayside,” Mitchell says. “So any project that has potential ownership changes and can be repurposed is something that will have a high level of importance for the city.”
KeyBank doesn’t have an interest in being involved in the project for the long term, so eventually it will be sold, Fisher says. “There’s been a lot of interest from other people in owning the project, so it could go quickly to somebody else,” Fisher says. “And that’s the goal – to move it into more permanent hands.”