A Message from our Managing Director
CBRE | The Boulos Company is pleased to present the 2016 Market Outlook for Greater Portland's commercial real estate market.
Our market continued to experience robust expansion on many fronts. Overall vacancy rates in the office sector are once again down, and we expect construction of new product in the near future to accommodate expanding businesses in the market. Unemployment in the Portland region is currently estimated at 3.4%, and the multi-family vacancy rate is near zero. There is a continued push to build market rate and affordable multi-family rental and condominium units in Portland. Retail and industrial vacancy rates in Greater Portland are near 5% and the tight market has resulted in increasing lease rates.
While the climate is incredibly strong on all fronts for Greater Portland, more rural parts of the state are experiencing weak demand and very little growth. There are pockets of activity, however, in areas like Bangor, Augusta, Lewiston/Auburn and Saco/Biddeford. A slate of proposed development projects for 2016 are poised to help meet demand for housing, office, retail and industrial users.
Looking ahead to 2016, we will continue to see increased demand from food-related producers, breweries and distillers in the Greater Portland area. There continues to be a lack of quality class A office space in downtown Portland. This will lead to new construction projects in the near future for technology-related and financial service growth companies. Demand for development sites will continue to be strong on the peninsula for hospitality, residential and mixed-use (office/retail) product. This demand for additional development, particularly on Portland's peninsula, will bring added pricing pressure on available sites and parking. Occupiers who do not need to be on the peninsula and are price sensitive will seek alternatives in areas close to Portland or in the immediate peripheries, but even large blocks of suburban space are filling quickly. The only question for 2016 is “where will the next major office building be built?”
Drew Sigfridson, SIOR