The lender acquired the first mortgage to Bayside Village in Portland for $9.2 million.
Photo courtesy of Rankin Construction
Portland, Maine — The Federated Companies has acquired the first mortgage for a distressed student housing community from KeyBank for $9.2 million. The property is Bayside Village, which is located at 132 Marginal Way near the University of Southern Maine at Portland. The five-story property contains 100 four-bedroom apartments on the upper floors along with covered parking and two commercial spaces on the ground level.
Federated negotiated with KeyBank, which has been reducing its exposure to defaulted notes, to secure the property at a cost of approximately $23,000 per bed — which is less than one-third of what it cost to construct the property in 2008. In addition, Federated negotiated with the property’s mezzanine lender to relinquish the property’s second mortgage and receive a deed in lieu at closing.
The company plans to stabilize the property in the near term. It will do so by establishing partnerships with the local university as well as the larger community. It will also convert some of the units into one- and two-bedroom apartments.
— Coleman Wood