Screenshot / MEREDA
Nate Stevens discusses southern Maine office space at the MEREDA Forecast Conference.
January 22, 2021
MEREDA Forecast Conference: Cautious optimism for southern Maine retail, office markets
Screenshot / MEREDA
Peter Harrington talks during the MEREDA Forecast Conference, held virtually on Thursday.
Last year was a mixed picture for retailers, as bars, gyms and any tourism-related businesses struggled while grocery stores, liquor stores and home-goods stores thrived, according to Peter Harrington of Malone Commercial Brokers.
Zeroing in on greater Portland retail vacancy rates, he said they edged up only slightly, from 3.19% in 2019 to 4.04% in 2020. Vacancy rates ranged from 1.4% in Falmouth to 6.2% in Portland.
The Portland area has a total of 6.6 million square feet of retail space.
“Overall, retail held up a lot better than expected during the pandemic,” he noted.
Another unexpected positive development was the number of new restaurants that opened during the pandemic, including Broken Arrow at 545 Congress St. in Portland and Mexican eatery Tacos Y Tequila in 3,916 square feet of leased space at 517 Ocean House Road in Cape Elizabeth. He also pointed to a flurry of lease activity by retailers in downtown Portland.
Looking ahead to 2021, Harrington predicted that downtown Portland will likely fare better than some enclosed retail spaces.
Turning his attention to the Maine Mall in South Portland, he noted that it has been hurt by a large number of retail bankruptcies, resulting in a 10% vacancy rate. Development opportunities in 2021 include redevelopment of the Sears parcel and to re-tenant the former Forever 21 store, about 40,000 square feet of space.
On the plus side, he highlighted newcomers such as Jordan’s Furniture, a Lululemon pop-up store and the Copper Closet.
Despite the current vacancies and uncertainty over whether some retailers will stay, he remains bullish on the Mall’s future, saying, “I do think the Maine Mall will find its way, and there are very few places in Maine where you can find that much parking.” He also doesn’t see the Sears store staying vacant for very long, suggesting a grocery store or big-box user as possibilities.
Strong demand for office space, but still a landlord’s market
Not knowing what to expect from COVID’s impact on the southern Maine office market, Nate Stevens of the Boulos Co. said he and his colleagues were pleasantly surprised when they conducted their annual survey.
Out of 352 buildings in greater Portland, Boulos found that the vacancy rate went up slightly, from 6.34% in 2019 to 6.97% in 2020 — “considering the circumstances, not so bad,” he said.
In 2021, Stevens foresees a return to the office for many companies sparking “fairly strong demand” especially in downtown Portland. He also expects suburban markets “to continue to remain unharmed,” with vacancy rates possibly dropping.
But he also said that while the next three to four months may be a good time to scout out deals on office space, he believes the market will continue to favor landlords.
“I don’t think it’s going to be a tenants’ market going forward,” he said.
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