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W W W. M A I N E B I Z . B I Z 27 F E B R UA R Y 6 , 2 0 2 3 F O C U S C O M M E R C I A L D E V E L O P M E N T the vacancy rate under 3%. at affects tenants, buyers and landlords. With ongoing supply chain issues, there's a trend in storage and ware- housing as businesses store supplies just in case they need them, instead of ordering supplies "just in time." e demand for space among cannabis companies continues. Lamontagne said he's seeing turnkey medicinal market cultivation spaces coming back onto the market. at leads to the question of what to do with industrial facilities that have been specifically built for cannabis, short of another cannabis business replacing previous users. Construction costs are hamper- ing deals.ere have also been major delays in deliveries of supplies — basic components like fixtures and ductwork as well as materials. As a result, transaction activity was ham- pered by supply chain issues. Concerning signals for the indus- trial sector include higher interest rates, inflation, labor issues and the possibility of a recession, he said. Inflation in particular raises nego- tiations with regard to setting lease renewals and rate increases. Former office space could be a new entry in the industrial market, he said. Some are primed for industrial conver- sion — similar to big-box retail conver- sions. Office spaces on the ground level, with interior HVAC, plenty of parking, and even loading areas translate to low- impact light industrial. Greater Bangor area forecast: A range of real estate demand B y L a u r i e S c h r e i b e r I n Greater Bangor, industrial vacancy is tight, making it extremely difficult to find new spaces for ten- ants, said David Hughes of Epstein Commercial Real Estate. Still, the area saw some industrial construction in 2022 and expects more in 2023. Downtown Bangor is bolstered by a strong office market, more and more apartments and a strong group of res- taurants and retail, he said. Housing developments in down- town Bangor have been a "game changer," he said. e last couple of years have brought more and more people living in the downtown and downtown res- idential conversions of older build- ings have picked up considerably, with 76 units under development or completed in the last year. Units have been leasing before they're even com- pleted, he said. "People enjoy living and working downtown," he said. e coming year is expected to be challenging due to a relatively static inventory in industrial and office space, continued low vacancies, higher interest rates and construction costs, he said. Southern Maine office forecast: 'Steady' B y A l e x i s W e l l s N ate Stevens, a partner and des- ignated broker with the Boulos Co., said downtown Portland rates have been increasing in demand. e city saw nine significant transactions downtown, eight to nine of them being subleases and downsizes. A few of these significant transactions downtown include 100 Middle St., 25 Pearl St., Two Portland Square and 120 Exchange St. "Demand will stay low but steady, a clearer market outlook, more time to look at the post-pandemic market, downtown vacancy rates will increase in Class B, suburban vacancy rates hold steady, and more opportunities for tenants to absorb some sublease spaces," said Stevens. W E B U I L D R E L A T I O N S H I P S ncormier@pmconstruction.com | (207) 282-7697 | www.pmconstruction.com Your trusted partner for commercial construction in Maine and beyond. Reach out to see how we may be able to play a part in your next development, or assist in your next project! ARCHITECTURE | INTERIOR DESIGN LANDSCAPE ARCHITECTURE | MASTER PLANNING LISTEN. INNOVATE. DESIGN. THE MOORING AT THE DOWNS | SCARBOROUGH, ME www.GawronTurgeon.com People enjoy living and working downtown. — David Hughes Epstein Commercial Real Estate

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