Return of the condos

For the past 15 years, Robert and Pat Amidon have called a three-bedroom ranch in Cumberland their home. Close to schools and a short commute to Portland, it was a great place to raise a family.

But now Pat Amidon wants to live where she doesn't have to mow grass or shovel snow. She'd like to walk to work, restaurants and shopping.

That's why the couple recently put down thousands of dollars to reserve four units in Waterview, a proposed, $20 million condominium in downtown Portland.

Waterview will have 94 units with prices ranging from $250,000 to $475,000. The 12-story project won't be ready for a couple of years, but Pat Amidon is getting in on the ground floor. A real estate appraiser, Amidon figures she'll have a great place to live, and a smart investment.

"When I look at the demographics," she said, "we are at the beginning of a period of very heavy demand from baby boomers."

Waterview is one of four major condominium projects announced recently in Maine's largest city. Together they have more than 290 units. A fifth proposal, just in the discussion phase, could add 300 more units downtown later in the decade.

These projects represent a new generation of high-end condominium development in Portland. The activity is being driven by several factors: Low interest rates, the desire of homeowners in their 50s and 60s to downsize without giving up amenities, and Portland's rising national profile as an attractive place to live.

Developers and early investors also hope to make money on the trend. Their instincts may be good. The City of Portland saw 250 condo sales in 2003, with a median price of $176,000. Last year, 299 condo units sold with a median price of $210,000. That's a 19 percent jump in value.

The rate tops single-family homes in the city, which also saw strong appreciation. Their value rose 16 percent last year, from $195,000 to $226,000, according to figures from the Maine Real Estate Information System.

Portland's experience reflects national trends. In late 2003, median sales prices of condominiums nationally exceeded single-family home prices for the first time. Strong demand in urban markets such as Boston and Los Angeles helped drive the appreciation. In resort markets such as Miami, condomania has buyers waiting in line for hours to reserve units that haven't been built yet.

Condominiums haven't always been a good investment in Portland. Long-time residents remember the late 1980s condo glut, when waterfront units were unloaded at auction during the subsequent recession. But condo values have shot up over the past few years, in tandem with overall home prices. As demand increases, inadequate supply is pushing prices even higher.

"The condo market is very strong," said Tim Seekamp, president of Harborview Properties in Falmouth. "Our problem is the lack of inventory."

Portland could use more affordable housing. But that's not where this latest condo market is moving. It's aimed at people who want views of the ocean, upscale kitchens and prime locations - and can pay from $200,000 to more than $1 million.

"I think the market is yearning for inventory like that," Seekamp said.

CONDOS WITH CHARACTER

Waterview is the vision of Jeffrey Cohen, a former Washington, D.C., developer who now owns the Time and Temperature building on Congress Street. It would rise up at 409 Cumberland Ave., between the downtown and the city's fast-changing Bayside neighborhood. Eventually, Cohen wants to build a larger, 300-unit project across the street. That development would include restaurants, a park, maybe an art gallery. It would reflect the festival marketplace concept that developer James Rouse brought to Boston in the 1970s.

"Portland has the architectural character to create that Fanueil Hall atmosphere," Cohen said.

Waterview isn't being advertised yet. But people are finding out about it and contacting Greg Nisbet at Downeast Realty in South Portland.

Nisbet is taking reservations from local people, such as Pat Amidon, from residents in the New York-to-Boston corridor looking for a retreat in Maine and from snowbirds who will live here in the summer and go someplace warm when the snow falls. Prospective buyers put down $5,000 refundable deposits, which will be transferred to purchase-and-sales agreements once the project secures its building permits. Nisbet said he's reserving two units himself, for a model unit and to rent.

"I personally don't see prices going down," Nisbet said.

VISION FOR CONGRESS STREET

Charles Hewitt grew up in Lewiston during the 1950s and remembers downtown Portland as a vibrant shopping destination. Now a painter who lives in New York City and owns a summer home on Vinalhaven, Hewitt was driving through the city last year when he passed a vacant storefront at 490 Congress St., formerly Bernie's Fashions.

Hewitt also invests in real estate and has rehabbed old industrial buildings in New Jersey. He immediately saw the potential to transform 490 Congress St. into modern, loft-style condominiums, within walking distance of an art school, museum, library, public market, health club, movies and restaurants.

"Portland has the sense of a suburb," Hewitt said. "The middle of town is a place you go to work. But it should have a life and a culture in the evening. People don't see Congress Street as an address they want to be associated with. I want to change that feeling."

Hewitt and four other artist-investors bought the building for $800,000. Workers are now turning it into Monument Plaza, three ground-floor storefronts and 23 condominium units, some with views of the harbor and Back Cove. Initial prices range from $199,000 to $610,000.

The project is expected to be ready by this fall. With minimal advertising, agents at Coldwell Banker Residential Brokerage have already taken $1,000 refundable deposits to hold seven units.

HILLSIDE LUXURY

Intown living may appeal to some buyers, but others want the amenities of Portland in a secluded setting. That's the market Diane Doyle of Doyle Enterprises hopes to capture with Graves Hill, a luxury high-rise project she has proposed for a wooded hillside on the Portland-Falmouth line.

Doyle's project would be located across from an emerging enclave of upscale homes and condominiums. Her next-door neighbor is Ocean Ridge, a recently built, 46-unit condominium where water-facing units sold for between $300,000 and $400,000.

Graves Hill is perhaps the most ambitious of the current condo proposals. Doyle is planning 98 units in two buildings that would each stand 100 feet tall, affording views of Casco Bay and the White Mountains. The project would feature a lap pool, underground parking, concierge service and a rooftop fitness center. Gourmet kitchens and large, custom interiors of between 2,000 to 4,500 square feet will appeal to buyers accustomed to comfortable living.

"A lot of people have a nice house in Falmouth or out of state, but they don't want to give up the amenities," Doyle said.

Luxury comes with a price, however. Basic units will start at $610,000. A penthouse on the 11th floor will cost over $1 million.

Doyle's project still needs final approval from Portland's planning board, so construction costs and financing are still being nailed down. If all goes well, Graves Hill would open in late 2006.

PRIME SITE ON WATERFRONT

Construction of a new cruise ship terminal is drawing developers to Portland's eastern waterfront, including Drew Swenson and his business partner Fred Forsley, owner of Shipyard Brewing Co. Doing business as Riverwalk LLC, they have proposed a $45 million project that includes a large parking garage, retail space and 78 condominiums in three different buildings.

This proposal still needs city approvals. Officials want to see the parking garage up by 2007, when the cruise ship terminal is expected to be done. With that time frame, Riverwalk LLC is waiting to do market studies on price and other considerations, Swenson said.

As they consider Portland's surging condominium market, developers say they are mindful of the overbuilding that took place in the 1980s. But Swenson said he sees "a substantial deficit" of housing for people who want to live in the city.

Pat Amidon agrees that any real estate investment is a risk. But banks aren't likely to finance projects today that don't have a chunk of units pre-sold, she said, and the rising tide of retiring baby boomers seems to assure a deep market.

At Waterview, Amidon and her husband have reserved four, two-bedroom units on the 10th floor. The condos range in price from $325,000 to $375,000. The units face different directions, so the couple hasn't decided which one to live in and which ones to sell.

"I want to see the views before I decide," she said. "We're covering our bases."

By TUX TURKEL, Portland Press Herald Writer
Copyright © 2005 Blethen Maine Newspapers Inc.