My mind wandered recently on a long drive, as it often does. I had the music going and, in typical Maine fashion, cell phone coverage was spotty. It was nice to effortlessly jump from thoughts of the upcoming holiday season with my young kids, to my 20-year high school reunion and old friends, to the promise of another long playoff run by my beloved Patriots. But as I passed commercial buildings and warehouses, my attention drifted to the bricks and mortar of the metro Portland industrial market. Here is what I thought as I hummed along to the hits: The Times They Are a-Changin’ Bob Dylan said it simply, and the statistics in our market suggest the same. The nearly eight-year run of a clear landlord’s market has finally shown indicators (albeit slight) that the pendulum is swinging the other way. While the year-end numbers are not yet complete, I am predicting vacancy rates will increase 200 to 300 basis points from our historically low 2017 rate of 1.25 percent. Let’s say, conservatively, our market increases to 3 percent overall vacancy. That is still what I would call a landlord’s market. However, what concerns me is that our added industrial …
In Southern Maine, we have an inventory problem. An inventory shortage, that is. During the recovery, there has been a steady flight to quality in all sectors including office, retail and, most strikingly, the industrial market. For the seventh consecutive year, the Greater Portland industrial market vacancy rate has dropped. We are now hovering close to a 2 percent total vacancy, which is grossly inhibiting end-users and growth. Throughout 2017, we worked with buyers and tenants that struggle to find suitable relocation and growth opportunities. Multiple offers and off-market sales have become commonplace, which frustrates end-users. We are coaching our clients to remain patient, flexible and communicative in this fluid and competitive market. Accordingly, the limited inventory drastically increased both lease rates and sales pricing for industrial style space. Sale price trends, in particular, deserve a closer look. In 2011, at the tail end of the recession, Class A and B industrial buildings were selling in the $40-per-square-foot range. Sales were almost exclusively going to owner-user businesses who were bullish enough to bet the economy would turn. Today, those businesses are competing with a smaller inventory pool, and against investors looking to diversify their portfolios. Quality industrial buildings are now …
As 2018 begins, it appears that the Greater Portland office market has continued to hold on to low vacancy rates as supply remains low across both Class A and Class B buildings throughout the market. CBRE/The Boulos Co is conducting its annual market outlook; it will be exciting to see the results, which we release in January. I anticipate the numbers to show a steady or slight decrease in vacancy rates across all submarkets but also show a much lower absorption rate, as momentum has appeared to slow down over the last 18 months. Transaction volume is trending far lower than in previous years and could possibly be the lowest number of transactions in the last seven years. However, there were a number a relatively large transactions completed over the last six months that will have a larger impact on the overall vacancy rate than simple transact ion volume. And we must consider that the small number of leases signed could also be due in part to limited supply. The Downtown Portland Class A office market, in particular, continues to operate at historically low vacancy rates. Over the last five years, there has been a steady decline in Class A …
The real estate environment in the Greater Portland region has been incredibly strong this year. On top of the favorable vacancy rates in the industrial, retail, and multifamily sectors, the office market vacancy in the region continues to dwindle, following the trend we’ve seen over the last five years. In a state with a geographic footprint that could nearly fit the rest of New England, the bulk of office inventory is concentrated in the southern region. Specifically, the supply is in the Greater Portland area, which comprises seven cities and towns. This region features just over 10.5 million square feet of Class A and Class B office space, with an additional 1.25 million square feet of medical space. Of that, 40 percent is located in downtown Portland. Portland is in the midst of a renaissance of sorts. Demand and desirability to live and work here, especially downtown, has grown significantly in recent years. We’ve become a “foodie” destination with a surge of new high-end restaurants and hotels. This coupled with beautiful water views and a unique way of life has attracted a younger demographic. Baby boomers and empty nesters are also relocating to this area from the suburbs. The movement …
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 …
The retail market in Southern Maine remains strong through mid-year 2015. Retail vacancy rates are low, investment sales are up, new retail projects are actively under construction, and plans for new retail developments are on the horizon. Positive trends in Maine’s retail sector have been evident for several years now, indicating that the market has stabilized and there is strong potential for further commercial growth over the next several years. According to Malone Commercial Brokers’ 2014 State of the Market Retail Survey, the Greater Portland retail vacancy rate for 2014 was 3.68 percent, compared to 10.8 percent in 2009. The vacancy rate has consistently dropped every year since 2009, with 2014 marking the lowest vacancy rate in Greater Portland in six years. Initially, annual retail vacancy rate declines in Southern Maine were related to the absorption of empty big boxes and retail centers located in the Maine Mall District in South Portland, as well as the newly created retail hubs built along the Maine Turnpike corridor during the construction boom in the early 2000s. By 2012, one of these new retail hubs located in the City of Biddeford saw Lowe’s, Linen ’N Things, Old Navy, and Best Buy close their …
Home to many of the fastest growing communities in Maine, the Sebago Lakes region is continuing its rebound from the Great Recession. Recent Census data puts Windham as the second-fastest growing Maine community, just behind our neighboring town of Gorham. All six of Windham’s bordering towns are in the top 30 fastest growing communities, including four in the top 10. Windham acts as the marketplace and service center for the region and serves a primary trade area population of 61,000 residents, and a secondary trade area of 80,000 people. The four-season nature of the region draws 500,000 visitors annually. Retail sales have rebounded from recession lows — and with 50 percent of the region’s sales, Windham leads the way. Construction of Single-Tenant Retail Remains Steady Tractor Supply (19,000 square feet), Goodwill (17,800 square feet) and Dollar Tree (10,000 square feet) have added to the 1.5 million square feet of retail space since 2012. AutoZone recently submitted plans for a 7,500-square-foot building to be constructed in the center of our retail district, and other retailers are showing interest in locations south of the retail center along U.S. Route 302. Vacancy Rates Remain Low Windham’s retail vacancy rate continues to remain low, …
The Southern Maine retail market is rebounding. According to Malone Commercial Broker’s retail survey, Greater Portland’s vacancy rate was at a 10-year high of 10.8 percent in 2009 but dropped down to 6.24 percent in 2011. We are seeing absorption of some empty big boxes, and new retailers are entering Maine’s marketplace. Last year, Buffalo Wild Wings opened its first Maine restaurant in South Portland and then opened a second location in Auburn. Five Guys opened its first Maine location in Portland in 2011, and Elevation Burger opened in South Portland at the beginning of 2012. Despite national headlines that Urban Outfitters is struggling, in 2011 the trendy chain leased approximately 10,000 square feet on Middle Street in Portland. Other retailers new to Maine’s marketplace over the last year include Aveda, BAM! Books-A-Million, J. Jill and White House Black Market. In addition to new retailers entering Maine, some existing national and regional retailers are expanding. To name a few: ACE Hardware has opened a new location in Falmouth; Subway has opened additional locations in Scarborough, Westbrook, and Lewiston; and Verizon opened a flagship store off of Franklin Arterial in Portland. Maine banks and credit unions are expanding as well. Norway …