🔒MEREDA chief forecasts ‘sustainable growth’ in year ahead

The year ahead will be defined not by “explosive growth, but by sustainable growth,” particularly in communities that streamline the permitting process, invest in infrastructure and say yes to responsible development, the president of the Maine Real Estate and Development Association said at a trade summit last week.

Jennifer Small, president of MEREDA and a partner at Portland-based Malone Commercial Brokers, was the keynote speaker at the New England Real Estate Journal’s "State of the Market" summit, held at the DoubleTree by Hilton Hotel in South Portland.

She predicts more mixed-use developments, fewer single-use projects and foresees renewed activity in office leasing "for well-located, high-quality buildings.”

Small noted that the state’s fundamentals will continue to attract both investment and residents.

“The challenge is making sure our infrastructure, housing supply and commercial development keep pace with that growth," she said.

Housing remains key to growth

“The biggest story in Maine is not commercial real estate. It’s housing,” said Small.

The ongoing housing shortage “is no longer simply a residential real estate issue,” Small said. “It is economic development.”

“Hospitals cannot recruit nurses, manufacturers cannot expand, schools struggle to attract teachers,” she said.

“Maine continues to need thousands of additional housing units across virtually every price point — from workforce apartments to single-family homes and senior housing,” she added.

The influx of tens of thousands of new residents post-pandemic has been a primary factor in driving both the need and the dramatic increase in housing prices.

The cost of building housing has also escalated, due to inflation, tariffs and workforce shortages.Small said.

Downtowns adjust to hybrid workers

Small also shared an update on the state’s office, retail and commercial real estate markets, with a focus on Greater Portland.

The downtown office market has recently seen its greatest transition since 2020, she said. With hybrid work here to stay, businesses are seeking to create offices workers want to come to.

“The downtown market has begun a reset,” Small said. “Companies need less square footage per employee — but better square footage.”

Class A buildings continue to attract tenants with modern amenities, energy efficiency, walkable neighborhoods and vibrant mixed-use environments.

The medical office sector is showing strong growth, Small noted, as health care providers open facilities that provide a range of outpatient services, close to where people live. Intermed’s new office, under construction at the Downs in Scarborough, is one example.

“Well-designed medical facilities remain the most sought-after in our market,” Small said, and provide one of the longest growth opportunities in the state.

Retail reinvented

After struggling to combat the advent of online shopping, the local retail sector is reasserting itself in Maine, Small said, citing new construction in grocery-anchored centers and mixed-use developments that provide services and maximize convenience for shoppers.

Investment opportunities in commercial development remain healthy.

“Investors continue to view Maine as a stable long-term market supported by population growth, limited supply and resilient demand,” Small said.

“Institutional investors, regional developers, family offices and private capital all continue looking for opportunities across multifamily, industrial, mixed-use and well-located retail assets.”