2018 Southern Maine OFFICE FORECAST Nate Stevens Associate Broker
THE MARKET OVERVIEW SUBMARKET FALMOUTH, SIZE CUMBERLAND & 341 YARMOUTH 1,043,195 Buildings Surveyed PORTLAND DOWNTOWN 4,335,200 12.1.2017 Total SF WESTBROOK 12,096,486 626,519 MAINE MALL 12.1.2016 Total SF AREA 191,500 SUBURBAN 11,904,986 2,054,193 PORTLAND 1,881,761 SINCE 2016 SCARBOROUGH 878,826 MEDICAL 1,276,792 Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
THE MARKET 191,500 ± SF TOTAL BUILDINGS ADDED IN 2017 1 Tyler Drive, Yarmouth 16 Middle Street, Portland 94,500± SF expansion 42,000± SF MAINE MEDIA COLLECTIVE 705 US Rte One, Yarmouth 97 Technology Park Dr, Portland 35,000± SF 20,000± SF Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
4.41 % THE MARKET HIGHLIGHTS Total Market Direct Vacancy for 2017 is 4.41% • 363,486± SF positive net • Transaction volume decreased absorption • Large transactions shaped the • Low supply continued market • Class A: Landlord market • New construction took shape Class B: Tenant market Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
THE MARKET Downtown vs Suburban VACANCY RATES DOWNTOWN SUBURBAN 14 14 CLASS A CLASS A CLASS B CLASS B 12 12 10 10 8 8 6 6 4 4 2 2 0 0 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
TRANSACTIONS SIGNIFICANT TRANSACTIONS - DOWNTOWN LEASE - 90,000± SF SUBLEASE - 12,761± SF Hancock Street, Portland One Monument Square, Portland WEX Certify Thomas Moulton - NAI / The Dunham Group Drew Sigfridson, SIOR - CBRE | The Boulos Company Charlie Craig - NAI / The Dunham Group Justin LaMontagne - NAI / The Dunham Group Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
TRANSACTIONS SIGNIFICANT TRANSACTIONS - SUBURBS/MEDICAL 134,349± SF SALE Maine Health 30,000± SF LEASE WEX One Riverfront Plaza, Westbrook 75 Darling Avenue, South Portland Charlie Craig - NAI / The Dunham Group Greg Hastings - NAI / The Dunham Group Joe Malone/Jen Small - Malone Commercial Brokers Frank O’Connor - NAI / The Dunham Group 25,000± SF LEASE Clark Insurance 19,435± SF LEASE Maine Health 1945 Congress Street, Portland 265 Western Avenue, South Portland 10,038± SF SALE NE Foot Roxane Cole Drew Sigfridson, SIOR & Ankle (St. Mary’s) Roxane Cole Commercial Real Estate CBRE | The Boulos Company 117 Auburn Street, Portland Kevin McQuinn 11,068± SF LEASE FedCap Rehab Services 24,000± SF LEASE Intermed Lux Realty 220 Maine Mall Road, South Portland 50 Foden Road, South Portland Mike Anderson Frank O’Connor Malone Commercial Brokers NAI / The Dunham Group Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
TRANSACTIONS SIGNIFICANT OFFICE INVESTMENT SALES 82 Running Hill Road, South Portland 120,000± SF $17,900,000 Charles Day - CBRE | The Boulos Company Tom Moulton - NAI / The Dunham Group 280 Fore Street, Portland 69,481± SF $21,500,000 63 Marginal Way, Portland 27,740± SF $5,400,000 Charles Day - CBRE | The Boulos Company Joe Porta, SIOR - CBRE | The Boulos Company Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
NEW CONSTRUCTION LOW VACANCY = NEW CONSTRUCTION 0.14% 279,000± SF NEW 0.12% 172,500± SF CONSTRUCTION NEW 0.10% CONSTRUCTION 0.08% 0.06% 0.04% 198,000± SF 198,000± SF 0.02% NEW NEW CONSTRUCTION CONSTRUCTION 0.00% ‘97 ‘99 ‘01 ‘03 ‘05 ‘07 ‘09 ‘11 ‘13 ‘15 ‘17 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
NEW CONSTRUCTION 170,800± SF UNDERWAY 0 Hancock Street 1945 Congress Street Portland Portland 100,000± SF 40,300± SF in two buildings 90,000 leased to WEX Clark Insurance & Diversified Partners Fall 2018 Spring 2018 Ocean Gateway expansion Widgery Wharf Portland Portland 12,500± SF 18,000± SF Three floors of office space Top floor leased to added to garage FL Putnam Spring 2018 Late 2018 Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
NEW CONSTRUCTION 307,276± SF PLANNED, PERMITTING, PRE-LEASING Portland Foreside Fisherman’s Wharf Portland Portland Up to 120,000± SF 45,000± SF Thompson’s Point 266 Commercial Street Portland Portland 60,410± SF 22,051± SF 170 Fore Street One Union Wharf Portland Portland 45,000± SF 14,815± SF Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
NEW CONSTRUCTION POTENTIAL DEVELOPMENT SITES ON THE HORIZON Bayside, Federated Companies site, Portland Johnson Road, Portland Portland Square, Portland 385 Congress Street, former Press Herald, Portland West Commercial Street, JB Brown lots, Portland 100 Fore Street, Portland ??? ± SF TOTAL Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
CONCLUSIONS GREATER PORTLAND’S OFFICE MARKET HISTORICAL DIRECT VACANCY RATES DIRECT VACANCY 533,390± SF 4.41% SUBLEASE 24,826± SF 0.21% TOTAL 558,216± SF 4.61% Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
CONCLUSIONS PREDICTIONS • Demand stays relatively low • 2-3 new office buildings as office users get creative in Greater Portland, 1-2 in downtown Portland • Older, unimproved products continue to struggle • Relatively flat vacancy rate • New construction downtown • Medical office continues to to create opportunities be market driver elsewhere, more supply? Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
Nate Stevens One Canal Plaza Associate Broker Suite 500 207.553.1702 D Portland, ME 04101 207.272.2385 C 207.772.1333 nstevens@boulos.com www.boulos.com Jessica Estes Special Michelle Peacock Thanks:
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