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W W W. M A I N E B I Z . B I Z 17 M AY 1 8 , 2 0 1 5 leases seem to indicate that the market hasn't improved much, if at all, this year. Two companies, Blue Tarp Financial and People's United Bank, are making the transition from Class B to Class A space, adding to the supply of Class B office space, he says. A lack of options for large tenants Kaplan, CashStar's CEO, says when the company was looking for a new office, the decision eventually came down to only two options that fit the company's requirements for space, price and amenities. Even then, he says, only one of those options truly supported CashStar's open workspace philosophy, and that was 25 Pearl St., where the company is now located. "I think the only challenge — and it's not insignificant — is finding enough contiguous square footage in the immediate Old Port area," he says. "We had two great options come up and we're fortunate. " If those options had not been available, Kaplan indicates that CashStar may have had to compro- mise and settle on a property that didn't necessarily fit its requirements. It could have gotten lower quality space and paid more to spruce it up. "It wasn't absolutely critical that we bought space that was designated as Class A," he says. "e reality was, we wanted to have a nice exterior but we were planning a full build-out." It's important that CashStar employees feel great about where they work. Matthew Barney, a broker at Malone Commercial Brokers, says a lack of options for larger compa- nies is one of the bigger issues facing Portland's real estate market right now. Barney authored and compiled his firm's most recent office real estate report for greater Portland. "For smaller tenants looking for 1,000 to 3,000 square feet, there is plenty of supply," he says." When you get above 7,500, 10,000 square feet, you really start to run out of options." Without those larger floor plan options, Barney says, companies may have to settle on choosing an office space located across multiple floors. While two floors can be manageable, he says that going over that number can create workflow and logistics issues. To address the market's lack of supply, downtown Portland needs new office construction, Barney says, but that will only happen if a one or a few companies can sign on as anchor tenants. He indicates that a large Portland law firm is currently assess- ing the market for new space. "Developers are poised to do it if a tenant signs on," Barney says. e prospects for new construc- tion are good, Stevens says, and that's being driven by increasing lease rates and a lack of supply. "ere are a few tenants considering new construction as an option because they can't find existing space," he says. New development comes with its own challenges, including having to wait on the planning and construc- tion. If new construction isn't feasible for a large company, it may end up moving into a Class B space and making its own improvements, Stevens says. at could help improve the Class B market and allow landlords to raise lease rates and make larger investments in their build- ings. Another option, he adds, is to ditch the idea of moving downtown altogether and go somewhere in the suburbs. "While there's a squeeze in the Class A, there's an opportunity for tenants to get into Class B and land- lords will be aggressive in getting them," Stevens says. D y l a n M a r t i n , M a i n e b i z o n l i n e e d i t o r, c a n b e r e a c h e d a t d m a rt i n @ m a i n e b i z . b i z a n d @ M a i n e b i z NEUROREHAB SERVICES For those working to recover from a brain injury, a comprehensive, coordinated treatment plan is essential. At the Goodwill NeuroRehab Services, we provide teams of specialists who assist in the redevelopment of physical mobility, memory, self-care, communication and other skills. To learn more, contact us or visit us: 75 Washington Avenue, Suite 300 | Portland | 800.341.4516 618 Main Street | Lewiston | 800.352.9547 comprehensive. coordinated. goodwillnne.org Are YOU a Premier EMPLOYER? Do you attract and retain top talent? Are your employees engaged, satisfied, and productive? Let's explore how KMA can help you become a "Best Place to Work in Maine." Register by May 22, 2015 at www.bestplacestoworkme.com. 207.232.4203 | info@kmaconsultingllc.com | www.kmaconsultingllc.com I n commercial real estate, buildings are split into three categories based on quality, price and other consider- ations, according to Building Owners and Managers Association's definitions: Class A: Most prestigious buildings competing for premier office users with rents above average for the area. Buildings have high quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence. Class B: Buildings competing for a wide range of users with rents in the average range for the area. Building finishes are fair to good for the area and systems are adequate, but the building does not compete with Class A at the same price. Class C: Buildings competing for tenants requiring functional space at rents below the average for the area. Commercial real estate terms S O U R C E : Building Owners and Managers Association

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