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V O L . X X X I I N O. X I I § 2 J U N E 1 , 2 0 2 6 8 A 15-suite, apartment-style bou- tique hotel called the Eva- lina was recently preparing to open its doors in Portland, one of a number of boutique and flagged properties in the development pipe- line across Maine. In Maine, that pipeline keeps flow- ing despite market headwinds that include high construction costs and cautious lenders. "It's very hard in this environment, certainly at the national level, for new projects to get built," says Matthew Arrants, principal of Arrants Co., a hotel investment and consulting firm in Falmouth. But, Arrants says, developers are getting projects done in Maine, and Greater Portland in particular, due to strong performance metrics coupled with construction rates that are up but not as high as other urban areas. Not for the faint of heart Ten years ago, Arrants predicted the rate of occupancy would fall as more hotels came online. "It didn't — so I learned not to guess on that," he says. "In theory, you do reach a point of equilibrium. But we've seen really tremendous growth in demand over the last several years. ings are looking pretty good." Hotel development is cyclical, says Sean Riley, CEO of Maine Course Hospitality Group, a hotel owner- ship and management company in Freeport. "It's not like the old days, with a 3% to 4% interest rate, when con- struction costs were lower and occu- pancy was skyrocketing," Riley says. He adds, "You need a good site, a good brand, a good developer. It's not for the faint of heart." Not just what it earns e owner of the building that houses the Evalina has said the project reflects a particular model of development. "A local owner, a local manage- ment team and a shared belief that buildings like this deserve to be cared for because of what they represent, not just what they earn," Scott Lind- say, who bought the building three decades ago, said earlier this year. e Evalina, in the renovated five- story Granite Block Building at 215 Commercial St. in Portland's Old Port neighborhood, features one- and two-bedroom layouts, arched windows, exposed masonry, original granite lintels and custom cabine- try. Some units have private decks, others a private mezzanine level and one a custom bar sink and entertain- ment nook. e project team includes Opti- mum Construction in South Portland and Fathom Cos., a Portland hospi- tality management and development Trends Challenges and opportunities for the hotel industry are varied, Ashish Sangani, owner of Giri Hotel Management, said in a recent MEREDA presentation. Pools, HVAC, elevators: Longer to repair, expensive Construction cost: Flattening but still historically high; could hinder new hotel supply Demand: 1.3% growth expected in Maine Business travel: Picking up Leisure travel: In decline S O U R C E : Giri Hotel Management P H O T O / T I M G R E E N WAY Scott Lindsay, the owner of the Evalina Hotel in the Granite Block building, in a suite in Portland HOTEL DEVELOPMENT B y L a u r i e S c h r e i b e r Despite market headwinds, developers are getting projects done in Maine