A 15-suite, apartment-style boutique hotel called the Evalina was recently preparing to open its doors in Portland, one of a number of boutique and flagged properties in the development pipeline across Maine.
In Maine, that pipeline keeps flowing despite market headwinds that include high construction costs and cautious lenders.
“It’s very hard in this environment, certainly at the national level, for new projects to get built,” says Matthew Arrants, principal of Arrants Co., a hotel investment and consulting firm in Falmouth.
But, Arrants says, developers are getting projects done in Maine, and Greater Portland in particular, due to strong performance metrics coupled with construction rates that are up but not as high as other urban areas.
Not for the faint of heart
Ten years ago, Arrants predicted the rate of occupancy would fall as more hotels came online.
“It didn’t — so I learned not to guess on that,” he says. “In theory, you do reach a point of equilibrium. But we’ve seen really tremendous growth in demand over the last several years. Things are looking pretty good.”
Hotel development is cyclical, says Sean Riley, CEO of Maine Course Hospitality Group, a hotel ownership and management company in Freeport.
“It’s not like the old days, with a 3% to 4% interest rate, when construction costs were lower and occupancy was skyrocketing,” Riley says.
He adds, “You need a good site, a good brand, a good developer. It’s not for the faint of heart.”
Not just what it earns
The owner of the building that houses the Evalina has said the project reflects a particular model of development.
“A local owner, a local management team and a shared belief that buildings like this deserve to be cared for because of what they represent, not just what they earn,” Scott Lindsay, who bought the building three decades ago, said earlier this year.
The Evalina, in the renovated five-story Granite Block Building at 215 Commercial St. in Portland’s Old Port neighborhood, features one- and two-bedroom layouts, arched windows, exposed masonry, original granite lintels and custom cabinetry. Some units have private decks, others a private mezzanine level and one a custom bar sink and entertainment nook.
The project team includes Optimum Construction in South Portland and Fathom Cos., a Portland hospitality management and development company. Lindsay called the building, dating back to 1854, a defining part of Portland’s Old Port.
“In the Old Port, property owners are, in many ways, modern-day Portland historians,” Lindsay said. “You learn the layers of the city through these walls — how it’s changed, who passed through, what endured. The Evalina wasn’t created for speed or scale. It was built thoughtfully, over time, because preserving this sense of place matters.”
Repurposed office building
A block away, at 245-253 Commercial St., plans are underway to repurpose an office building into a hotel called the Nathan at Portland Harbor Hotel. Earlier this year, Portland commercial real estate developer Bateman Partners LLC bought the 44,316-square-foot, five-story building, dating back to 1860, from Portland insurer MEMIC.
Gregory Boulos and Drew Sigfridson of the Boulos Co. represented the seller in the transaction. The conversion from office to hotel or residential use is on trend for the downtown area, Boulos said earlier this year.
“This deal is a textbook example of converting excess office space into alternative use,” Boulos said.
Over the past four decades, Bateman Partners has built commercial and residential projects worth over $210 million in Maine and New Hampshire. That included the development, more than two decades ago, of the Portland Harbor Hotel at 468 Fore St., across an alley from 245-253 Commercial St.
With the purchase of 245-253 Commercial St., the plan is to create another hotel that will connect to the Portland Harbor Hotel via a skyway.
Features of the Nathan to be preserved include exposed beams and bricks and high ceilings, Nathan Bateman, vice president of Bateman Partners, has said. A restaurant and bar area are planned for the fifth floor, with expanded deck space. Non-guests will be able to take an elevator to the top floor. Guests from both hotels will be able to intermingle and use amenities in the other.
The project includes disassembling offices down to the stud walls and building out guest rooms plus amenity spaces. Demolition is in the works. Installations include plumbing, heating and cooling systems.
“The shell is in perfect shape,” said Bateman.
The project team includes Portland architecture firm Archetype principal Mike Coyne and PC Construction, which is based in Vermont with an office in Portland. It’s expected the hotel will open by this August.
“It was a natural opportunity to expand the Portland Harbor Hotel,” Bateman said.
Bank vault
Fathom Cos.’s plans are advancing for the historic rehabilitation and adaptive reuse project at 465 Congress St. on Portland’s Monument Square, to convert the former Fidelity Trust office building into a luxury boutique hotel. Partnering on the project with Portland commercial real estate development consultancy Swingpoint Development, the redevelopment is expected to wrap by early summer 2027, says Jim Brady, Fathom’s president.
The 1910 building, once housing offices and a retail bank, was vacant when Brady bought it in 2024. The structure is in good condition. Plans call for 100 keys plus full-service food and beverage. Historic features include a basement vault with original doors and an internal central staircase with a skylight. The project team includes AAmp, an architecture and design studio based in Portland and Toronto; and Freeport general contractor Zachau Construction. The name of the hotel hasn’t been released yet.
On Portland Thompson’s Point, the dual-branded 148-room, five-story Residence Inn/Moxy Hotel by Marriott is slated to open this summer next to a museum, connected to an event space and within walking distance to a transportation center. Amenities include a restaurant and bar, fitness center and indoor pool. The project team includes general contractor Procon Inc. and management firm Colwen Hotels, both based in New Hampshire.
Extended stay
Earlier this year, Maine Course Hospitality Group, a hotel ownership and management company in Freeport, opened HomeAwhile, a 109-suite extended-stay hotel at 205 Southborough Drive in Scarborough, aiming to “bridge the gap between traditional hotels and long-term apartment living,” Sean Riley, the group’s CEO, has said.
The group’s portfolio of 28 hotels includes 14 in Maine. Some are acquisitions with potential for improved performance; others are ground-up construction.
Belmont, N.H., design-build firm Opechee Construction Corp. partnered on the Scarborough project. HomeAwhile is the group’s own brand, designed to address a gap in the extended-stay market, including traveling nurses, IT folks and construction workers. The units have home-like amenities such as kitchens.
The group owns another extended-stay hotel next door: Homewood Suites, at 200 Southborough Drive, is more upscale, he said. At 210 Southborough Drive, the group owns the Courtyard by Marriott, a traditional hotel for overnight stays
In Ellsworth, Witham Family Hotels, led by David Witham, has construction underway on a Home2 Suites by Hilton at 6 Downeast Highway, also known as High Street.
The hospitality company is headquartered in Ellsworth but has most of its hotel portfolio in Bar Harbor. The extended-stay property will have 83 suites with fully equipped kitchens, dedicated workspace areas and sofa beds, designed for short- and longer-term stays. Amenities include an indoor pool, fitness center, guest laundry, grab-and-go retail and an outdoor patio with fire pits and grills.
“We are currently targeting a mid- to late-August 2026 opening, with construction progressing well,” says Eric Marichal, Witham’s director of strategic operations.
The project team includes Wright-Ryan as construction manager and Chambersburg, Pa., architect Newcomer Associates.
The Home2 Suites is on the main corridor to Bar Harbor and Acadia National Park.
The extended-stay segment is the fastest-growing in hospitality and is underserved in the Ellsworth area, Witham has said. Potential guests include traveling nurses, construction crews, Jackson Lab employees and leisure travelers.
Off the beaten path
Elsewhere in Maine, recent projects include the Foreside Inn at 29 Wentworth St. in Kittery, developed by Madbury Real Estate Ventures, part of Wakefield, Mass., private investment firm Madbury Capital.
Features include extended-stay suites with kitchenettes; most rooms have private balconies. The project team includes Winter Holben Design & Architecture in Kittery and three New Hampshire firms: Altus Engineering, Woodburn & Co. Landscape Architecture and JJ Welch Construction.
“The Foreside Inn captures the creative spirit and chic aesthetic of Kittery Foreside, tucked into a cozy spot off the beaten path, just steps from all the area has to offer,” Taylor McMaster, Madbury’s managing partner, has said.
Turnover
The hotel real estate market has been active, too. In recent months, the Marginal Way House Hotel in Ogunquit sold, after receiving multiple offers, for $9.995 million to a neighbor who owns other hotels. Roger Daigle of Daigle Commercial Group brokered the sale. In Searsport, the Captain Nickels Inn, listed on the National Register of Historic Places, sold to an Arizona couple getting into the bed-and-breakfast industry. Dana Moos of Portside Real Estate Group brokered the deal.
In Boothbay Harbor, the Topside Inn and the neighboring Mid-Town Motel sold to 7 Padmavati Hospitality LLC, led by Paul Patel, who owns Wells real estate management services company SB Management LLC. Daigle and Benjamin Kramer of Daigle Commercial Group brokered the sale.
“From the moment I arrived at the Topside, I felt quite at peace,” Patel has said. “It wasn’t just a business decision. It felt very personal.”
Two neighboring hotels along South Portland’s Sable Oaks Drive sold in off-market transactions within a month of each other to out-of-state hotel operators. An affiliate of AON Hospitality Group acquired a Holiday Inn Express and an affiliate of Colwen Hotels bought the Portland Sheraton at Sable Oaks.
Schenectady, N.Y.-based Cherko Fusco Realty represented the sellers. David Costello of Rockwell Group served as broker of record on the Holiday Inn Express transaction.
“Closing hotel transactions has become increasingly challenging over the past few years as lenders have remained cautious toward the sector,” Bryce Cherko, principal of Cherko Fusco Realty, said earlier this year. “Despite broader market headwinds, Portland continues to stand out as one of the most attractive hospitality markets in New England. Even with a slower pace of activity over the past year, fundamentals in the Portland market remain strong and continue to attract high-quality ownership groups.”
