The vacancy rate for industrial properties in southern Maine has been rising after a decade of shrinking vacancies, and was at a seven-year high at the end of 2025, according to the Portland-based Dunham Group’s annual market survey.
The commercial brokerage’s 15th annual year-end report tracked over 36 million square feet in more than 1,000 properties in 17 communities stretching from northern York County to the a region that includes Lewiston, Auburn and Gray.
The combined overall vacancy rate was 3.32%, up from 2.49% a year earlier — an increase for the second consecutive year.
The survey noted that more significant than the increase in vacancies was the fact that available properties were sitting on the market longer than had been the norm.
Specifically, spaces larger than 20,000 square feet spent longer on the market than they had in more than five years.
Smaller spaces, in high-demand locations, continue to be scarce and are commanding premium lease rates.
“There are simply fewer industrial tenants in the market today than there have been, on average, over the last decade,” report editor Justin Lamontagne noted.
The Greater Portland region had the lowest vacancy rate at 2.71%, but was still up, from a rate of 1.89% a year earlier. Portland alone had a rate of 4.4%, reflecting close to 329,000 square feet of available space.
Lamontagne questioned whether this is a trend for the city or, “Are there underlying issues of doing business in Portland that are pushing businesses to other municipalities, or is it simply a coincidence?’
Dunham has in fact seen a flight to the Lewiston/Auburn market for the past few years, as rates there are generally at a lower price point than in Portland. The overall vacancy rate in the twin cities market was 3.34% at the end of 2025.
Northern York County had the highest vacancy rate of 5%, though the report notes that number was heavily influenced by one large property in Wells. Rates in Biddeford were 3%; 2.6% in Sanford.
The towns of Gray, Falmouth, Yarmouth, Freeport and Kennebunk all had zero industrial properties for lease.
The average asking lease rate for 2025 was $9.65 per square foot, and the survey predicts that isn’t likely to ease this year, though it may hold.
On the sales side, there continues to be a shortage of inventory, especially for smaller owner-user space, fueling competitive pricing that can top $200 per square foot.
“The meteoric run has cooled,” the report found. “Inventory has risen. Demand has slowed. And while the market remains functionally healthy, it is no longer a one-way street dominated by landlords.”