Cannabis, work-from-home, suburban flight, and craft beverages continue to drive industrial vacancy to all-time lows. Lack of space has resulted in a spike in lease rates and increase in spec-builds.
As the cannabis industry, the work-from-home trend, suburban flight, and the craft brewery, distillery and kombuchery fads continue to prevail in Maine, industrial vacancy is at an all-time low.
The need for distribution and warehousing space has never been greater, said Josh Soley, founder and president of Maine Realty Advisors in Portland.
This lack of space has resulted in a spike in lease rates and increase in spec-builds that started in Cumberland County and is now spreading to secondary markets in York, Kennebec, Sagadahoc and Androscoggin counties.
Whereas primary markets had been leasing warehouses for $7 to $8 per square foot and secondary markets were $5 to $6 per square foot, Soley says he’s seeing lease rates jump as much as 15% in the primary market and as much as 25% in the secondary markets.
“The lines between these markets are beginning to blur,” he says. “Whereas there has been a great deal of spec-builds these past two years in the primary market, I predict we will start seeing an increase in builds in the secondary market.”
Whereas the cannabis market is tied to the political climate, the work-from-home and suburban flight trends appear to be connected to the pandemic, he noted.
“I believe the craft products are driven by our thriving economy,” he adds. “A shift in any one of these variables would change the current lack of industrial space we are experiencing right now.”
Soley’s overall outlook for 2022? “I’m very optimistic,” he says. “I believe 2022 may mark the end of COVID and thus the end of supply-chain related construction delays. I think we may see the beginning of an inflationary period, but nothing our market cannot weather.”
