SOUTHPORT — Thad Paul, purchaser of Ocean Gate Resort at 70 Ocean Gate Road in Southport, sees opportunity in the Boothbay Region’s growing visitor market.

Paul, who heads up The Wardman Group, a real estate investment firm in Washington, D.C., purchased the property for an undisclosed sum from the GEM Hospitality Group, which is headed up by Frank Gaynor. The sale, which closed Dec. 1, 2017, was brokered on behalf of both buyer and seller by Nicholas Farrell and Roger Daigle of Daigle Commercial Group in Portland.

Daigle said that he and his group have long been active in selling hotel and resort properties in the midcoast region, including the Boothbay peninsula. A previous sale that he and his associates brokered was the Linekin Bay Resort in Boothbay Harbor in December 2015.

The Ocean Gate deal had its roots a couple of years ago, Daigle said.

Ocean Gate Resort had been of some interest to another potential buyer, who approached Daigle about buying a resort. That prompted Daigle to ask Gaynor if he would consider selling his property. As it turned out, the first potential buyer moved on to other listings, but Gaynor commissioned Daigle’s firm to prepare a market valuation, which came in favorably. Gaynor posted the resort with Daigle, which listed it at $5.9 million.

“The rest is history,” said Daigle, adding that his firm sells more than 85% of its listings. Daigle and his colleagues had shown midcoast properties to Thad Paul and knew that he was in the market for an oceanfront resort.

A resort with a range of amenities

Built in 1956, the 65-unit property is on 33 acres and has 1,400 feet of ocean frontage and recreational facilities that include a heated pool and hot tub, floating dock with kayaks and canoes, nine-hole miniature golf course, as well as tennis and basketball courts.

Gaynor owned and operated the hotel for 11 years.

Reached by phone in Washington, Paul said he started The Wardman Group two years ago to focus primarily on lodging acquisitions. Along with the Southport property, he also owns a senior housing facility in South Carolina and two small hotels in the Florida Keys. He started the company after a career in hotel administration and general real estate investment.

Paul has traveled to Maine in the past for leisure and had looked at other properties in the midcoast area. This one particularly appealed to him because of its location.

“I really like the market overall,” he said. “It’s a neat little town. I liked the waterfront location with the 33 acres of land. In addition, it was an attractive price and a property that has good current performance and also good upside potential.”

Paul plans to make improvements to the property and operations, including a new website, which has been launched.

“We have about a $1.2 million renovation planned over the next two years,” he said. “That’s underway already.”

The majority of the work is focused on selective upgrades of the guest rooms; modernizing the dining room, including the creation of a separate private dining room that can serve small group meetings; and converting the under-utilized fitness center into a second meeting room.

Overall, he said, the property is in good shape.

“The prior owners had reinvested in the property every year,” he said. “So this is just taking what they did and refining it.”

He’s engaged Scout Hotel & Resort Management as its operator.

Ocean Gate Resort has been a true labor of love for our family, and we couldn’t be more pleased with The Wardman Group’s interest in it,” seller Gaynor said in a press release. “We have complete confidence that Wardman and Scout are the right team to shepherd the resort into its next phase.”

Ambitious plans

Thad Paul said the guest-room upgrades include basics like replacing tired carpeting. The meeting room conversion is expected to boost revenue by attracting midweek corporate and association business, which in turn could increase occupancy.

The resort is seasonal, operating May through October.

“Our plan is to increase the season by a week in October,” he said. Paul has a marketing campaign to promote the “new” Ocean Gate Resort, which is scheduled to reopen this spring.

Paul cited regional economic development activity, like the Coastal Maine Botanical Gardens, development of hotels and a country club, and road upgrades in nearby Boothbay Harbor and Boothbay, as activities that are helpful for not only for the success of the property but the region’s economy.

“I certainly think there’s some potential there,” he said.

A Massachusetts-based hotel investor group called Atithi LLC, which owns and operates a large portfolio of hotels under major brands, purchased the Ramada Inn & Conference Center in Lewiston for more than $4 million.

Roger Daigle, president of the Daigle Commercial Group in Portland and his associates, Mitchell Muroff and Nick Farrell, represented the seller, George Gendron, in the transaction. The group also found the buyer. The sale closed May 26.

The Ramada, which has 117 guest rooms and executive suites, is at 490 Pleasant St.

Buyers bullish on Maine’s potential

Ashutosh Nayak, a New Jersey resident, is one of three partners who comprise Atithi LLC. He told Mainebiz the investor group owns a variety of businesses, including hotels in Massachusetts, New Jersey and New Hampshire. Atithi is building its first hotel, in New Hampshire.

The Ramada is the investor group’s first venture in Maine.

“We wanted to expand in Maine and New Hampshire,” Nayak said. “This location has potential.” Nayak explained that the Ramada has its own niche in the mid-scale market that targets a huge customer base between lower-scale motel type of lodgings and luxury lodgings. The Lewiston facility, in particular, is uniquely positioned not only for its hotel rooms but for its huge conference center, banquet facility, restaurant and bar.

“We feel all the businesses combined complement each other,” he said.

The investor group first looked at the property nine months ago, but kept the idea on hold as the construction project in New Hampshire unfolded. The group decided to actively pursue the property in January.

Nayak expressed appreciation to the city of Lewiston and to Mechanics Savings Bank in helping the investors close on the deal.

“We chose a local bank, and they’ve been great partners toward the process,” he said.

Passion for the hospitality business

Originally from India, Nayak arrived in the United States with his partners when they were all students. In New York, he pursued an undergraduate degree in management information system technology, his other area of interest. His first job out of college was as a front desk clerk in a hotel, and he fell in love with the hospitality business.

“It’s always been my passion to be in the hospitality business,” he said. “It’s my hobby also, because I travel a lot. I see hotels in the U.S., Europe and Asia. There’s money there, but also it’s the satisfaction that we can serve customers. We can be part of people’s lives.”

The Lewiston Ramada, employing up to 90 people, dates to 1974. The hotel is in good condition, but the group is planning some upgrades. Partial renovations, starting this year, include upgrades to the restaurant, banquet area, and 40 to 50 rooms, followed by upgrades to remaining rooms and the technology infrastructure. Nayak said he expects investment this year to be $500,000, and between $800,000 and $1 million in all.

The seller, George Gendron, is a well-known businessman in Lewiston, said Daigle. The Ramada was Gendron’s only hotel property, acquired seven or eight years ago. At that time, said Daigle, the property was “in need of shoring up,” so Gendron invested in improvements and stabilized operations. Daigle listed the property about a year ago, receiving interest from other buyers, but no takers until Atithi.

It’s not unusual for a property like this to take a while to sell, Daigle said.

“This is not just a hotel. It’s also a meeting and conference facility,” he said, with 15,000 square feet of event space that can accommodate 600 conference or banquet guests, as well as amenities such as a restaurant, bar, fitness center, and gift shop. “They’re known as full-service hotels in the industry, and that requires someone who has the right background, because a lot of business comes from weddings, conferences, and other events.”