🔒MEREDA conference forecasters weigh headwinds, opportunities for Maine real estate in 2026

The Maine Real Estate and Development Association held its annual forecast conference on Thursday at the Holiday Inn by the Bay in Portland. More than 900 people registered to attend the all-day event. The annual event offers insights into a range of sectors, including the construction outlook, office and industrial markets, residential sectors, retail and hospitality. The event also included an analysis of legislation that affects the real estate industry. “Our industry and our state are facing real challenges and opportunities,” MEREDA president Shannon Richards said in her opening remarks.

Member Showcase swagfest

While sessions were happening upstairs, the downstairs Member Showcase was buzzing with networking, socializing and attendees snagging swag from pens, koozies and tape measures to sweet treats and miniature plastic foam hard hats. One company offered boxes of “premium golf balls” designed in Germany and manufactured in Taiwan. Some vendors added their own flair to draw visitors, including a $200 restaurant gift certificate raffled off by A/Z Corp., a subsidiary of Cianbro Corp. “We had nearly 100 participants in our raffle,” said Scott Tompkins, A/Z Corp.’s business development director. “As always, networking was the biggest MEREDA conference benefit.”

At a strategically placed corner booth, Maine Community Bank Vice President Hilary Mitchell performed card tricks to show the bank is “all in on smart deals” in its home state. “Our main goal was to create something engaging that would stand out in the crowd,” she told Mainebiz afterward, estimating that she performed a total of 100 to 150 tricks after moving at a “pretty good clip” all day. “Last year, we knocked people’s socks off with branded socks, so we knew we had to raise the bar,” added Mitchell, the bank’s director of client engagement. “As we brainstormed, card tricks felt like a fun, unexpected idea and [it] all came together when we realized we could tie it back to our brand. We’re all in on Maine, so the ‘all in on smart deals’ concept was a natural fit.” She said the team is already trying to figure out how to top the experience next year. — Renee Cordes

AI’s promise and caveats

From 24/7 automated property management chatbots to futuristic building designs, AI will continue to have an impact on all areas of real estate, Steve Weikal, industry chair of the MIT Center for Real Estate, said in his keynote address. Weikal also works in venture capital, as managing partner of the MET Fund II at the MIT Center for Real Estate. Demonstrating a prompt put to Claude about a brownfield site in London, Weikal showed how the AI tool can be used to estimate a purchase price and projected annual return, or cap rate, while underscoring the importance of human input. “This stuff is like witchcraft. It’s crazy,” he said. “Would you stake your career on this answer? No, because it lies. You have to be really careful.” But Weikal noted that real estate is well-suited for AI given the industry’s reliance on data and predicted that human engagement with property will change. For example, a contractor doing a construction site walk-through can use voice commands to capture images of potential trouble spots and schedule meetings with project team members to address those problems. Examples of energy-related innovations include a type of concrete developed at the MIT Concrete Sustainability Hub that can store electricity, and an Ikea store in Milan, Italy, powered by geothermal energy, which Weikal likened to solar power. “It’s like free energy,” he said. As the AI landscape shifts, real estate professionals need to widen their perspective beyond just real estate, Weikal said. “Now we’re all in the infrastructure and energy business, too.” — Renee Cordes

Legislative overview

Elizabeth Frazier, a Pierce Atwood partner who represents MEREDA on legislative issues in Augusta, cited three areas that favor real estate development. Impact fees on development. Funds municipalities redeploy for capital projects such as school upgrades or road improvements must now be returned within 365 days, which is a boon for developers. Parking mandates. Towns cannot require more than one parking spot for a project designated in a “growth area” (itself a bit of a vague word, she said). Developers are also now allowed to have off-site parking within a quarter mile of a project, easing space constraints. Land use. New state guidelines allow for a lot size of 5,000 square feet in “growth areas,” while eliminating growth caps. Affordable housing projects also have increased height allowances. Looking ahead, Frazier said the MEREDA is still working to eliminate the end point on historic tax credits, which she said are vital to downtown redevelopment. (She cited Skowhegan’s Spinning Mill redevelopment, a project that relied on historic tax credits.) For now, the measure is only guaranteed through 2030; she said MEREDA favors eliminating the “sunset” aspect, making the program open-ended. — Peter Van Allen

Construction outlook

Dave Thomas, regional director of operations at Consigli Construction’s Portland office; Drew Wing, president of Zachau Construction; and Ron Milley, president and CEO of Consultant Services New England, highlighted barriers and bright spots for Maine's construction industry in 2026.

• A shortage of tradespeople continues to be an issue and, by 2031, 40% of workers will be retirement age. While there are more training programs underway for hundreds of students, the industry won’t see the impact for years.
• Maine relies heavily on immigrants and needs more of them, in addition to more housing and health care to support them.
• Project proposals that do not include subsidies are less likely to pan out. The cost of residential construction has doubled in the past few years, though tariffs have not been a significant factor. A $10 million project in 2019 is a $14.5 million project today.
• Construction projects are still ongoing, with Zachau seeing record volume in 2025. But the larger, more complicated projects are not getting built, due to financing and the approvals process.
• Panelized and pre-fab construction components have become ubiquitous, but Maine needs more manufacturing facilities.
• Policymakers and new business collaborations could facilitate more construction in the coming years.

— Tina Fischer

Office and industrial outlook

With about 842,318 square feet of office space available in Greater Portland, that translates into a vacancy rate of 8.84%. “That’s not great for the market right now,” said Nate Stevens, managing partner and designated broker with the Boulos Co. While the rate is the highest since 2012, Nate said it’s not yet reached its peak. At 2.47%, the sublease rate has decreased two years in a row and means that fewer companies are making decisions mid-lease that they need to get out. Downtown Class A office vacancies are down to a “healthy rate” of 4.1% with a lack of availability for larger spaces, while Class B rates have skyrocketed amid a “flight to quality.” It’s a different situation in the suburbs, where the Class A vacancy rate is higher than for Class B properties. In the southern Maine industrial market, vacancies vary between 2.71% in Greater Portland and 5% in northern York County, putting the average at 3.34%, according to Sam LeGeyt, a partner and broker with the Dunham Group. He predicts that sale prices will continue to climb from the current $120 per square foot average, saying he “wouldn’t be surprised” to see prices approach the $200 range for bigger buildings. Later, in response to a question about homelessness and drug use in downtown Portland, moderator Jennifer Small of Malone Commercial Brokers described Congress Street as “difficult” for real estate and emphasized ongoing efforts to bring more people downtown. — Renee Cordes

Residential and multifamily outlook

Nova Tower, a partner with Waypoint Brokers Collective, said inventory for single-family homes is still short but improving.

• With an influx of condominiums in recent years, the ones that are for sale are sitting on the market longer than single family homes: 11 days, on average, versus 17 days.
• The home market is still slightly favoring the seller and prices are unlikely to come down.
• Nationally and in Maine, the median age of a first-time homebuyer is 40.
• Newer construction homes are the hardest to sell, largely because they often lack the character that many buyers want. Buyers are being far more careful before making a home deal — which is a change from pandemic-era homebuying frenzy.

Brit Vitalius, president of Vitalius Real Estate Group, said the multifamily rental market is beginning to cool; supply is up and people are renting longer, rather than buying.

• Prices for multifamily buildings are still up in Portland, but down in the Saco and Biddeford markets, where inventory has increased in the past few years.
• Properties that need the most work are the hardest to sell; few buyers have the appetite for major renovations.
• There are still Federal Housing Authority mortgage rates available in the 3% range for three-unit buildings.
• Rent control in Portland is “brutal,” and combined with rising insurance costs and stagnated rates, could prompt a number of owners to sell in the near future.

— Tina Fischer

Retail and hospitality outlook

Ashish Sangani, owner of Giri Hotel Management, said he is “cautiously optimistic about the hospitality outlook and future bookings.” Sangani said there was a 30% drop in Canadian visitors to Maine last year, with a major impact on Maine businesses. Sangani also said that new hotel construction is coming to the market throughout the state, including an office-space conversion in Portland. Nick Margitza, senior director of leasing at WS Development, said that indoor mall visitation remains below pre-pandemic levels while open-air shopping centers have seen an increase in foot traffic. He expects the trend to continue, with more shopping plazas popping up. — Alexis Wells