Please do not leave this page until complete. This can take a few moments.
Vacancy rates in greater Portland’s industrial real estate market have been dropping every quarter for more than five years, leading to what one broker calls a critical space crunch for businesses looking to expand or relocate.
NAI The Dunham Group, a commercial real estate brokerage firm located in Portland, has been tracking the vacancy and lease rates of industrial buildings in the greater Portland area since 2010, when the rate was between 8 and 9%, said Justin Lamontagne, a broker with the firm.
Now, the rate is about 4% — historically low for this market, he said
The reason for the low vacancy rate, Lamontagne said, is there’s been little added inventory of industrial building in the area, while the economy has improved. Companies are reinvesting in their businesses, he said, which often leads to real estate investments.
“But there’s been very little new construction,” Lamontagne said. “So it’s a matter of absorption. They’ve absorbed existing space. The message now is, we need more inventory.”
As a member of the Maine Real Estate & Development Association, and sensing a trend but lacking hard data, Lamontagne said he decided in 2010 to inventory every industrial building in the greater Portland region. He presented an overview of southern Maine’s industrial real estate market at MEREDA’s 2015 Annual Forecast Conference in January
According to a December 2014 survey by the firm, there are 556 industrial buildings with just under 18 million square feet of space in Portland, South Portland, Westbrook, Scarborough, Gorham, Saco and Biddeford. Industrial buildings include warehouses and distribution and manufacturing plants. In Maine’s rural areas, there doesn’t appear to be the same space crunch for industrial buildings, he said.
The solution to the space, Lamontagne said, is new construction, but most of his clients prefer to buy an existing building because it’s far more affordable than building new.
Earlier this year, Lamontagne helped broker a deal to move Cape Seafood, a seafood processor owned by Luke's Lobster founder Luke Holden, into 25,000 square feet of space of a 44,000-square-foot food processing facility on Industrial Park Road in Saco.
“I have clients who have made it through the recession and are now looking to expand, debating between adding to an existing building or moving to a different location,” he said. “Lack of inventory has proven quite challenging for a lot of my clients, because if they want something, it’s not necessarily available right now.”
He advises companies to plan expansions or relocation further out in the future. It used to take him two to three months to find a location for a company. Now, it takes six months to a year.
“Companies need to plan,” Lamontagne said, “in terms of time, and also have some level of flexibility in their current location.”
Read more
Portland real estate still hot, so where's the best place in Maine to get a home loan?
The Giving Guide helps nonprofits have the opportunity to showcase and differentiate their organizations so that businesses better understand how they can contribute to a nonprofit’s mission and work.
Learn MoreWork for ME is a workforce development tool to help Maine’s employers target Maine’s emerging workforce. Work for ME highlights each industry, its impact on Maine’s economy, the jobs available to entry-level workers, the training and education needed to get a career started.
Learn MoreFew people are adequately prepared for all the tasks involved in planning and providing care for aging family members. SeniorSmart provides an essential road map for navigating the process. This resource guide explores the myriad of care options and offers essential information on topics ranging from self-care to legal and financial preparedness.
Learn moreThe Giving Guide helps nonprofits have the opportunity to showcase and differentiate their organizations so that businesses better understand how they can contribute to a nonprofit’s mission and work.
Work for ME is a workforce development tool to help Maine’s employers target Maine’s emerging workforce. Work for ME highlights each industry, its impact on Maine’s economy, the jobs available to entry-level workers, the training and education needed to get a career started.
Few people are adequately prepared for all the tasks involved in planning and providing care for aging family members. SeniorSmart provides an essential road map for navigating the process. This resource guide explores the myriad of care options and offers essential information on topics ranging from self-care to legal and financial preparedness.
In order to use this feature, we need some information from you. You can also login or register for a free account.
By clicking submit you are agreeing to our cookie usage and Privacy Policy
Already have an account? Login
Already have an account? Login
Want to create an account? Register
In order to use this feature, we need some information from you. You can also login or register for a free account.
By clicking submit you are agreeing to our cookie usage and Privacy Policy
Already have an account? Login
Already have an account? Login
Want to create an account? Register
This website uses cookies to ensure you get the best experience on our website. Our privacy policy
To ensure the best experience on our website, articles cannot be read without allowing cookies. Please allow cookies to continue reading. Our privacy policy
Comments