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Southern Maine
OFFICE FORECAST
2018
Nate Stevens Associate Broker
THE MARKETOVERVIEW
12.1.2017 Total SF
12,096,48612.1.2016 Total SF
11,904,986 191,500 SINCE 2016
PORTLAND DOWNTOWN
4,335,200
MAINE MALL AREA
2,054,193
SUBURBAN PORTLAND
1,881,761
FALMOUTH, CUMBERLAND &
YARMOUTH
1,043,195
MEDICAL
1,276,792
SCARBOROUGH
878,826
WESTBROOK
626,519
SUBMARKET SIZE341
Buildings Surveyed
MEREDA’s 2018 Annual Forecast Conference
Southern Maine Office Forecast | Nate Stevens
Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
THE MARKETBUILDINGS ADDED IN 2017 191,500 ± SF TOTAL
705 US Rte One, Yarmouth 35,000± SF
16 Middle Street, Portland42,000± SF
1 Tyler Drive, Yarmouth 94,500± SF expansion
97 Technology Park Dr, Portland20,000± SF
MAINE MEDIA COLLECTIVE
Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
4.41%THE MARKETHIGHLIGHTS
• 363,486± SF positive net absorption
• Low supply continued
• Class A: Landlord market Class B: Tenant market
• Transaction volume decreased
• Large transactions shaped the market
• New construction took shape
Total Market Direct Vacancy for 2017 is 4.41%
Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
THE MARKETVACANCY RATES Downtown vs Suburban
DOWNTOWN
14
12
10
8
6
4
2
02012 2013 2014 2015 2016 2017
CLASS A
CLASS B
14
12
10
8
6
4
2
02012 2013 2014 2015 2016 2017
SUBURBAN
CLASS A
CLASS B
Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
TRANSACTIONSSIGNIFICANT TRANSACTIONS - DOWNTOWN
SUBLEASE - 12,761± SFOne Monument Square, PortlandCertify Drew Sigfridson, SIOR - CBRE | The Boulos CompanyJustin LaMontagne - NAI / The Dunham Group
LEASE - 90,000± SFHancock Street, PortlandWEX Thomas Moulton - NAI / The Dunham GroupCharlie Craig - NAI / The Dunham Group
Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
TRANSACTIONSSIGNIFICANT TRANSACTIONS - SUBURBS/MEDICAL
134,349± SF SALE Maine HealthOne Riverfront Plaza, WestbrookCharlie Craig - NAI / The Dunham GroupJoe Malone/Jen Small - Malone Commercial Brokers
30,000± SF LEASE WEX75 Darling Avenue, South PortlandGreg Hastings - NAI / The Dunham GroupFrank O’Connor - NAI / The Dunham Group
19,435± SF LEASE Maine Health265 Western Avenue, South PortlandDrew Sigfridson, SIOR CBRE | The Boulos Company
24,000± SF LEASE Intermed50 Foden Road, South PortlandFrank O’Connor NAI / The Dunham Group
11,068± SF LEASE FedCap Rehab Services220 Maine Mall Road, South PortlandMike Anderson Malone Commercial Brokers
25,000± SF LEASE Clark Insurance1945 Congress Street, PortlandRoxane ColeRoxane Cole Commercial Real Estate
10,038± SF SALE NE Foot & Ankle (St. Mary’s)117 Auburn Street, PortlandKevin McQuinnLux Realty
Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
TRANSACTIONSSIGNIFICANT OFFICE INVESTMENT SALES
82 Running Hill Road, South Portland120,000± SF $17,900,000Charles Day - CBRE | The Boulos CompanyTom Moulton - NAI / The Dunham Group
63 Marginal Way, Portland27,740± SF $5,400,000Charles Day - CBRE | The Boulos CompanyJoe Porta, SIOR - CBRE | The Boulos Company
280 Fore Street, Portland69,481± SF$21,500,000
Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
0.00%
0.02%
0.04%
0.06%
0.08%
0.10%
0.12%
0.14%
97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17
Vacancy Rate
‘97 ‘99 ‘01 ‘03 ‘05 ‘07 ‘09 ‘11 ‘13 ‘15 ‘17
279,000± SF
NEW CONSTRUCTION 172,500± SF
NEW CONSTRUCTION
198,000± SF
NEW CONSTRUCTION
198,000± SF
NEW CONSTRUCTION
LOW VACANCY = NEW CONSTRUCTIONNEW CONSTRUCTION
Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
NEW CONSTRUCTIONUNDERWAY
0 Hancock Street Portland100,000± SF90,000 leased to WEXFall 2018
Widgery Wharf Portland18,000± SFTop floor leased to FL PutnamLate 2018
Ocean Gateway expansion Portland12,500± SFThree floors of office space added to garageSpring 2018
1945 Congress Street Portland40,300± SF in two buildingsClark Insurance & Diversified PartnersSpring 2018
170,800± SF
Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
NEW CONSTRUCTIONPLANNED, PERMITTING, PRE-LEASING
Portland Foreside PortlandUp to 120,000± SF
Fisherman’s Wharf Portland45,000± SF
170 Fore Street Portland45,000± SF
One Union Wharf Portland14,815± SF
307,276± SF
Thompson’s Point Portland60,410± SF
266 Commercial Street Portland22,051± SF
Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
NEW CONSTRUCTIONPOTENTIAL DEVELOPMENT SITES ON THE HORIZON
???± SF TOTAL
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
Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
CONCLUSIONSGREATER PORTLAND’S OFFICE MARKET HISTORICAL DIRECT VACANCY RATES
DIRECT VACANCY533,390± SF
4.41%SUBLEASE24,826± SF
0.21%TOTAL558,216± SF
4.61%
Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference
CONCLUSIONSPREDICTIONS
• Demand stays relatively low as office users get creative
• Older, unimproved products continue to struggle
• New construction downtown to create opportunities elsewhere, more supply?
• 2-3 new office buildings in Greater Portland, 1-2 in downtown Portland
• Relatively flat vacancy rate
• Medical office continues to be market driver
Nate StevensAssociate Broker207.553.1702 D207.272.2385 [email protected]
One Canal PlazaSuite 500Portland, ME 04101207.772.1333www.boulos.com
Special Thanks:
Jessica Estes Michelle Peacock