Renewed activity, especially in the Portland market, bodes well for Maine development
As the new president of the Maine Real Estate and Development Association, I have become more keenly aware of the challenges and difficulties in developing commercial and residential projects in Maine. The time and effort associated with due diligence, engineering and permitting is not for the faint of heart! Developers must be persistent and maintain a singular focus on moving their projects forward one step at a time. Let's not forget the numbers have to work and lending institutions need to be convinced a development project will be successful in order for a project to move forward and actually get built. Over the years, we have seen many exciting projects go through the permitting and approval process, but fail to get financing and never move beyond the architect's drawing table. Now, we appear to be on the cusp of another potential building boom in the greater Portland area and we are hopeful this will translate into other parts of Maine.
MEREDA members are noticing significant activity from developers, engineers, architects and attorneys in moving a variety of projects through the regulatory process for permits and approvals. Major potential projects include:
- A $40 million renovation to the Eastland Hotel announced by Starwood, together with New Castle and RockBridge Capital, to create a full-service Westin Hotel. This project also plans to take advantage of the historic tax credit program, which has been a terrific financial tool for construction projects on historic buildings.
- A $110 million mixed-use project at Thompson's Point received site plan approval from the city of Portland and will include offices, a hotel, an event center for the Red Claws basketball team, trade shows and exhibitions, a 700-space parking garage, sports medicine clinic and restaurant.
- Other proposals include marine-related industrial development along the West Commercial waterfront in Portland, a proposed office building along West Commercial Street of 65,000 square feet, and at least five other entities are seeking new construction opportunities for office and light industrial uses in greater Portland in the range of 15,000 to 40,000 square feet each.
These developments are in addition to the growth we continue to see in the health care industry, with organizations throughout the state expanding their footprints to keep up with ever-increasing demands from an aging population. Outpatient clinics are being built throughout our state, and some are being situated in smaller communities, outside of the regional centers. We're also witnessing major renovations and abandonment of older health care facilities. For example, a $322 million regional hospital is currently under construction on a 165-acre campus in North Augusta for MaineGeneral Health.
There are also several multi-family and residential condominium projects in various stages of development in greater Portland. Interestingly, we see a continued trend for more downtown, urban development projects. Residential tenants and condominium buyers are increasingly seeking more pedestrian friendly, downtown settings where they can walk to work and have ready access to local amenities. Developers have recognized this trend and are proposing projects to cater to this increasing market demographic. Among them:
- A phased development project to add 500 residential units has been proposed by the Federated Companies in Bayside. The Bay House is about to commence construction on approximately 94 residential units near India Street.
- Developers Collaborative is working on another project in the area of Franklin Arterial and India Street to develop 26 residential condominiums.
- Avesta Housing recently completed 34 apartments on Oak Street targeted for tenants involved in the local arts community. It also is constructing Phase 2 of Pearl Place near Whole Foods consisting of 54 family units, and has started construction on the former Adams School site for 16 residential condominiums.
- Opechee is planning to start Phase 2 construction on the Jordan's Meats site with 18 residential condominiums, and first-floor retail and office space. Currently, the development of affordable housing, multi-family housing and downtown residential condominiums appears to be the busiest sector right now for new construction and renovation projects in greater Portland.
As we reach our mid-year point for 2012, we look at the commercial real estate sectors and see relatively limited new development for retail and industrial properties. There are still existing vacancies that need to be absorbed before new construction can commence in earnest in those sectors. Still, we are seeing some office and medical uses with significant growth and the need for specialized buildings and new construction will be the only viable alternative.
Hopefully, this increased activity is a sign that we are emerging out of our long economic slow-down and can look forward to new construction and redevelopment projects in the coming year. Things always seem to take a little longer to get to Maine. Based on the number of cranes I see on the Boston skyline, our time might be right around the corner.
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