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, consistently hovering around 2 percent during our annual inventory. Movement between retail, office, and manufacturing space, along with additions of new square footage has maintained the total retail space at about 1.59 million square feet. The absorption rate for new space is relatively quick, due to the purpose-built nature of our new development, but even in a recently built 7,600-square-foot multi-tenant property, new retail tenants quickly filled the space. Older single-tenant and strip locations are having a more difficult time finding tenants.
As for recent movement, both Goodwill and Dollar Tree expanded into larger single-tenant stores, while store closings included Fashion Bug and Big Lots. The former Goodwill space is slated for conversion to a bowling center. Two spaces in Shaw’s Plaza, managed by WP Realty, remain vacant: the former Dollar Tree space (7,000 square feet) and the 7,000-square-foot space left available when Fashion Bug ceased operations.
The Big Lots closure at the WRE-managed Windham Mall made available 40,000 square feet. Current tenant Smitty’s Cinema and Pub, a 2013 entrant into the Windham market, expanded into 4,000 square feet of the vacated space with a new theater.
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Property Repurposing
In addition to the Smitty’s Cinema expansion in the Windham Mall, and the planned conversion of the former Goodwill space into a bowling center, other properties have been repurposed recently. In the same plaza as the Goodwill space, offices are being converted into a CrossFit center. The former 30,000-square-foot LaValley Lumber retail and warehousing space has been converted into manufacturing use with four tenants currently occupying the property.
First Flagged Hotel in Region
The region is also excited about the entrance of Heyland Development LLC’s Microtel Inn & Suites into the Sebago Lakes region. Currently being constructed in Windham, this 54-room hotel will expand to 70 rooms in the near future. It is the first flagged hotel along U.S. Route 302 between Greater Portland and New Hampshire. The project also has approval for 9,000 square feet of retail space, which Heyland Development is marketing to regional and national retailers. Completion of the hotel is slated for fall 2014 while the retail space will be constructed at a future date.
Seacoast Fun Park’s owner Roy Moore has stated that many of his clients, whether winter snow tubers or summer visitors, inquire about lodging opportunities for a family weekend stay. The new hotel will provide visitors with that option. Located across busy Route 302 from the new Microtel, Seacoast Fun Park, a four-season recreation park, is expanding. New water features including slides and a lazy river, along with a 5,000-square-foot expansion of the restaurant and clubhouse will round out this regional attraction.
Future Holds Steady Growth
With strong, steady population growth and the growth in total retail sales, as well as the retention of large-format retailers — including Walmart, Lowe’s, Home Depot and our Hannaford and Shaw’s grocery stores —Windham’s retail market has proven resilient through the Great Recession. The area’s first flagged hotel, a continuing stream of new single-tenant properties, and a continued low retail vacancy rate all signal continued growth for the retail development market.
— By Thomas Bartell, Executive Director, Windham Maine Economic Development Corporation. This article first appeared in the June/July 2014 issue of Northeast Real Estate Business magazine.