Greater Portland Retail Bucks National Trend with Decreasing Vacancy
The retail sector in Southern Maine’s commercial real estate market remained strong through year-end 2015 with all signs indicating continued improvement through 2016. While the national average retail vacancy rate increased to 12.6 percent in 2015, the retail vacancy dropped to 3.6 percent in Greater Portland, according to Malone Commercial Brokers’ annual retail survey.
Greater Portland is a major market in Southern Maine consisting of 6.46 million square feet of retail space. 2015 marked the sixth consecutive year of declining vacancy rates in the market since its 10-year high of 10.8 percent in 2009. Meanwhile, the national retail vacancy rate rose in 2015 over year prior, marking the first vacancy increase in five years and nearly matching the 2011 national vacancy rate of 12.9 percent.
Heading into the third quarter of 2016, Southern Maine’s retail sector remains extremely healthy. Short-term forecasts for Portland predict continued absorption of existing space, new retail construction, and strong market competition.
Significant Developments and Redevelopments
Thompson’s Point, Portland — Represented by Drew Sigfridson of CBRE / The Boulos Company, this 29-acre redevelopment offers up to 220,000 square feet of retail, office, hospitality, and recreational space off of Interstate 295. Final renovations of the 34,000-square-foot Brick North building located at Thompson’s Point were completed in May, and the new tenants of the 100 percent-leased structure were open for business in June. In addition to attracting various tenants this year, Thompson’s Point has an on-site music venue with major acts slated to perform this summer, including Bob Dylan, Mavis Staples, and The Avett Brothers.
Marginal Way Corridor, Portland — Once a strip for automotive and industrial-related uses, the Marginal Way corridor has been redeveloped over the last decade and now features retail and office space occupied by tenants such as Whole Foods, Walgreens, Trader Joe’s, AAA, Verizon, World Gym, and many others. Over the last year, a site formerly occupied by Century Tire, has been redeveloped into two retail buildings and rebranded as Century Plaza. Earlier this year, Chipotle and T-Mobile occupied two units in the 8,300-square-foot building and one of two units in the 4,950-square-foot building is currently under contract. Down the street at 191 Marginal Way, new construction of a 16,750-square-foot retail complex is scheduled for completion by fall 2017. Both properties are on the market for lease through Joseph Porta and Greg Boulos of CBRE / The Boulos Company at asking rates ranging from $35 to $45 per square foot NNN, setting new set new records for this area of Portland.
Old Port, Portland — Located between Commercial Street, Middle Street, Franklin Arterial, and Temple Street, Old Port is a dense retail and restaurant district in Portland. Considered “recession proof” by most area commercial brokers, lease rates are now pushing $30 per square foot, modified gross, versus $25 per square foot, modified gross, as seen over the last several years. Additionally, retail locations on Middle and Pearl streets used to be considered the fringe of the Old Port but national retailers have revamped these areas with their tenancy, providing more exposure for local retailers. At the beginning of last year, Anthropologie opened its 8,000-square-foot store at 60 Pearl Street. The deal was brokered by Peter Harrington of Malone Commercial Brokers. Harrington then leased 3,400 square feet to Angela Adams and 3,500 square feet to Rough & Tumble at 131 Middle Street in the fourth quarter of 2015. He currently has 4,100 square feet under contract at 152 Middle Street. Availability of prime retail space is now almost non-existent in this market.
Congress Street, Downtown Portland — There is a reason why Congress Street was named one of the top 10 best streets in America by the American Planning Association. Home to Portland’s Financial and Arts District and within a short walk to Portland’s Old Port, Congress Street now offers a healthy mix of retail, office, and residential space. The revitalization of Congress Street continues as street-level units, formerly occupied by low exposure office and general business, are now leased to specialty service and general retail. Over the last two years, the entire first floor of the rebranded Ocean Gate Plaza at 511 Congress Street has been re-tenanted with a new restaurant, Soakology, and several high exposure service related businesses. Additionally, the 6,100-square-foot wing of the complex (currently occupied by Maine International Trade’s office) is up for lease with strong interest from various restaurants, luxury-oriented businesses, and retailers. Hospitality has also made a major presence on Congress Street. After serious renovations to the former Portland Press Herald office building, the Press Hotel opened its doors in the Spring of 2015.
Editor’s note: Cardente Real Estate handles leasing at Ocean Gate Plaza.
— By Matthew Cardente, President/Designated Broker, Cardente Real Estate. This article originally appeared in the June/July 2016 issue of Northeast Real Estate Business magazine.