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W W W. M A I N E B I Z . B I Z 21 J U LY 1 1 , 2 0 1 6 W hen Peter and Noah Bissell started Bissell Brothers Brewing Co. in 2013, they were entering a market already saturated with craft beer brands. Starting up at One Industrial Way in Portland, they planned to sell, distribute and pro- mote their product in-house, essentially by word-of- mouth and personal connections. With millennials a coveted target, and Portland acquiring a growing taste for locally produced prod- ucts, they were soon growing. But their physical space was crowded and disjointed. "We were scooping up as many units as we could get," says Peter Bissell. Each was 1,500 square feet. ey had three connected units, so they were able to open up the walls, and a fourth elsewhere in the building. By 2015, the situation proved untenable. "I was looking at what we were doing and how stuff was laid out. ere was little room for growth, both floor space and infrastructure. We were operating in different little cells. We needed a big, open space we could design from the beginning." With an idea that the solution could be a move to ompson's Point, Peter Bissell called Justin Lamontagne, a broker at NAI e Dunham Group. Fast forward to the present and the brewery is now in 10,700 square feet of redeveloped space at 4 ompson's Point, the so-called Brick North build- ing, with a separate 3,500-square-foot warehouse on Presumpscot Street. "We're so happy we did it," says Bissell. "I feel like the space crunch in Portland, where every- one wants both residential housing and commer- cial space — it's just not out there otherwise. is [ompson's Point] is like a new neighborhood down here. But there are only so many places you can build in Portland proper." Lamontagne cites the "vision and willingness" of developer Mark ompson to tackle ompson's Point, a 30-acre former rail yard (that had its name long before the developer, who is not related, came along). "Now it's a mixed-use building with brewery, retail, a winery and office space," says Lamontagne. "at's a great example of repositioning an anti- quated building into something that's fully leased at market rates — and is a great community amenity." Critical space crunch Portland is in a pickle when it comes to available space — both commercial and residential. "ere's a clear flight to quality across the board in the commercial sector, including industrial, office and retail," says Lamontagne. "Users have been absorbing the Class A and Class B space at a rapid pace. at, combined with lack of new construction, has left of us with a real space crunch." Lamontagne issued a report earlier this year based on an inventory he performed of every industrial building in the Greater Portland region — Portland, South Portland, Westbrook, Scarborough, Gorham, Saco and Biddeford — that showed the industrial real estate market in the Greater Portland area has seen 21 consecutive quarters of declining vacancy rates. In 2010, the vacancy rate was between 8% and 9%. Today, the rate is about 4%, historically low for this market, he says. As a result, Southern Maine is seeing a critical space crunch among Maine com- panies needing space to expand or relocate. at's a problem in a time of economic growth. A number of companies are buying up existing buildings because it can be more affordable to reha- bilitate and repurpose old structures than to build new ones. Lamontagne says the cost for new construction of an industrial building, for example, is $100 to $115 per square foot. at compares to the average sale price of existing buildings of $55 to $60 per square foot. Even with rehab costs, that can make it more attractive for businesses to wait and find an existing building. "It's happening all over Greater Portland," Lamontagne says. "What users and developers are realizing is it's more affordable to redevelop an old, perhaps inefficient building than it is to build from the ground up. Furthermore, a lot of users, particularly office users, like the finish of a redeveloped product. Justin Lamontagne, a commercial real estate broker at NAI The Dunham Group, helped negotiate space at Thompson's Point for Bissell Brothers Brewing Co., where he's pictured. A space crunch is forcing industrial-use companies to look beyond Portland. P H O T O / T I M G R E E N WAY Space crunch With commercial space in short supply, companies look beyond Portland B y l a u r i e s c h r e i B e r C O N T I N U E D O N F O L L OW I N G PA G E » F O C U S

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