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V O L . X X V I I I N O. I I I F E B R UA R Y 7 , 2 0 2 2 28 C O M M E R C I A L D E V E L O P M E N T T he annual outlook conference forecast held by the Maine Real Estate & Development Association was loaded with data, charts and diagrams. But it was clear much of the information backed up what Maine had seen in the past year: Residential real estate prices hit new highs and in turn spurred new development Industrial space continues to be snapped up by cannabis companies and others The office market remains strong even as employers navigate hybrid workspaces Regional markets have gotten stronger as investors get priced out of Portland. Overall, the MEREDA conference, held Jan. 20 at the Cross Insurance Arena in Portland, presented a bullish — if nuanced — outlook for the Maine real estate industry in 2022. A lesson in adaptation for the southern Maine office sector B y J e s s i c a H a l l "e office market and office occupi- ers are learning to adapt" to the pan- demic, says Nate Stevens, a partner and broker with the Boulos Co. e total 2021 vacancy rate was 6.73%, which was an improvement from 6.9% the year before. "It's a tenant's market. e pan- demic put the tenant back in the driver's seat," Stevens says. "Options are now there for tenants. ere are choices for tenants." Portland is actually performing strongly compared with other locales. A recent Boulos survey found that 49% of respondents were fully back in the office in Portland, compared with national rates in the 30% range, Stevens says. One factor dampening the office market is the amount of sublease space available, with 335,800 square feet of it now on the market. "e sublease spaces will affect the vacancy rate going forward," Stevens says. Overall, the downtown Portland mar- ket will continue to improve, but subur- ban vacancy rates will increase, especially around the Maine Mall area, Stevens says. "Investors have confidence in offices long term," Stevens says. "I'm confident in the office space, especially in down- town Portland." 'Solid' 2022 lies ahead for retail real estate in southern Maine B y R e n e e C o r d e s New restaurants snapping up vacant spaces in Portland, along with com- mercial development in Westbrook's Rock Row and Scarborough's "mini- Rock Row" on Route 1, all point to a positive outlook for the southern Maine retail market. at was the readout from Peter Harrington of Malone Commercial Brokers in his analysis. Going from 2021 to 2022, the sector is "on very solid footing," he says. "I'm not saying we're crushing it, but we're certainly holding our own," he adds. And that solid footing has been more solid than expected during the pandemic. As for the Maine Mall, Harrington says the current vacancy rate is 8% as the facility looks to diversify to residential, hotel, entertainment and so-called experiential uses. Current vacancies include 10,000 square feet where Town Buffet had been, 10,000 square feet in the Real estate's BULL MARKET Despite weaknesses in the economy, MEREDA conference showed optimism B y M a i n e b i z S t a f f F O C U S F I L E P H O T O / T I M G R E E N WAY G R A P H I C / T H E D U N H A M G RO U P Peter Harrington, a broker at Malone Commercial Brokers, says vacant stores are filling up. It's a tenant's market. The pandemic put the tenant back in the driver's seat. Options are now there for tenants. There are choices for tenants. — Nate Stevens Boulos Co. S O U R C E : Malone Commercial Brokers SOUTHERN MAINE RETAIL VACANCY RATES BY CITY Total Area Vacancy % Vacant % Of Total Cape Elizabeth 34,735 0 0.0% 0.53% Falmouth 544,682 3,676 0.7% 8.25% Portland 1,326,110 79,423 6.0% 20.08% Scarborough 1,391,266 13,700 1.0% 21.06% South Portland 2,872,007 238,990 8.3% 43.48% Westbrook 435,906 15,292 3.5% 6.60% TOTALS 6,604,706 289,081 4.38% 100.0% GREATER PORTLAND AVERAGE INDUSTRIAL LEASE $/SF

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