Greater Portland Industrial Property Market
Source: NAI The Dunham Group
Lease rate per square foot Vacancy rate
Portland industrial-property market
The vacancy rate for industrial properties in Maine’s largest metro area,
greater Portland, dropped by more than a percentage point between
year-end 2016 and year-end 2017, to a historic low of 1.25 percent, according to a market report by NAI The Dunham Group. The extremely
tight vacancy rate should prompt additional construction. The problem
in recent years, however, according to the report, is that lease rates have
not risen fast enough to entice developers to build.
That trend started to change in 2017 and is expected to continue in the
year ahead, as lease rates last year bumped up significantly compared
to 2016, with the average lease rate rising $1 per square foot over that
period, according to NAI The Dunham Group. At least seven new industrial-property construction projects broke ground in 2017. Even with that
new construction, however, the market continues to be extremely tight.
Consequently, more speculative development is planned in 2018, but
even that is not expected to satisfy all of the demand for industrial space
in the area, NAI The Dunham Group reports.
What the locals say
“We’re a big manufacturing state. … We all remember how hard
it was only a few years ago during the recession. We couldn’t
give away industrial space. … A lot of our Maine-based businesses are [now] benefiting from a good run in the economy,
and business is good for everybody. Not screamingly good, but
generally good, and that creates jobs, and that creates a need
for growth. So, that positive run in the economy over the past
10 years has had a major impact.”
By Bill Conroy
Maine’s economy is linked to land and sea.
Some 1,800 manufacturing companies employ more than 50,000 Maine
workers, making the sector a driving force of the state’s economy and accounting for about 10 percent of its gross domestic product (GDP), according to the National Association of Manufacturers.
A number of other industry sectors feed into Maine’s manufacturing engine,
including agriculture, aerospace, biotech, technology and communications
— each of which also contributes to the state’s economic punch. The state
exported some $2.9 billion in goods and services in 2016, International
Trade Administration data shows. The major exports included fish and other
marine products, transportation and electronics equipment, and paper.
In fact, Maine’s forestry industry has long been a major asset for the state
and has made it one of the nation’s leading producers of paper and pulp.
The state boasts some 16. 8 million acres of commercial forest land, much
of it composed of valuable northern hardwoods, such as American beech,
yellow birch, sugar maple and spruce-fir trees.
A robust agricultural industry, including aquaculture, has made Maine a
leading supplier of farm-raised seafood as well as land-grown crops such
as wild blueberries and potatoes. Maine also is the largest U.S. supplier of
Tourism, too, is a major economic driver in Maine. A 2016 report from the
Maine Office of Tourism indicates that tourists spent some $6 billion in the
state that year, supporting about 106,000 jobs. In addition, some 70 percent
of Maine residents participate in the ample outdoor recreational activities
available in the state, such as watersports, snowshoeing and kayaking, according to a report by the Maine Outdoor Industry Association. The report
notes that outdoor recreation activities in the state generate some $548 million annually in state and local tax revenue.
The state also is working to expand its technology-industry base. The Maine
Technology Institute, a nonprofit, publicly-funded corporation that provides
seed capital and commercialization assistance, has invested about $180 million in 2,000 projects statewide over the past 20 years and also attracted
about $900 million in matching investments from the private sector.
In 2016, Maine’s economy expanded at about the same rate as the national
economy overall, posting a 1.6 percent increase in GDP, compared with the
national mark of 1.5 percent. The state’s economy retracted in the first quarter of 2017, recording zero growth, according to the U.S. Bureau of Economic Analysis, but it snapped back in the second quarter, posting a 2 percent
jump in GDP. n
Partner and broker
NAI The Dunham Group