Portland, ME The Maine Real Estate & Development Association (MEREDA) hosted more than 800 in late January for the group’s annual Forecast Conference, where about a dozen experts reviewed Maine real estate trends from 2015, and predicted what is in store for 2016. A veritable who’s who of development in Maine listened with rapt attention and celebrated the market’s return to pre-recession, 2006 levels. The latest numbers from The MEREDA Index, an economic metric mean to gauge activity in Maine real estate, came in at 100.
“The Index confirms that commercial real estate activity continues to be a strong driver for the state – but, for the first time in a long stretch, residential activity was a large contributor as well,” said Michael O’Reilly, president of MEREDA and a senior vice president at Bangor Savings Bank. “In fact, residential saw sales of existing units up 14%. Median ?price, ?mortgage ?originations? and ?residential ?permits are also trending upward.”
Justin Lamontagne of NAI The Dunham Group in Portland, along with other experts in the southern Maine office, industrial and retail markets, called for more inventory, noting that businesses seeking prime locations in have found nowhere to go. Lamontagne predicts this situation will likely to persist until new development occurs. For instance, increasingly, industrial space is being used for brewery operations. And, class A office space in downtown Portland, which saw two record value transactions in the first part of 2015, is scarce due to high desirability; as a result, the market for nice class B office space is tightening.
Juxtapose that with a prediction that a dearth of construction workers could potentially drive up costs of new construction, and the Maine market is expecting values and demand to stay high through the coming year.
Portland’s lifestyle accolades are driving high occupancy levels and rates, and not just for hotels, which have been popping up all over the waterfront and city center. Multifamily developments and single family sales in southern Maine are “very hot,” according to experts. In particular, David Marsden, realtor with Bean Group, noted that the luxury home trend is waning for both millennials and baby boomers, while the demand for smaller footprint, urban, more conscientiously built properties is on the rise.
Vin Veroneau, president of developer J.B. Brown & Sons recently announced a five-story market-rate development in Portland, to include street-level commercial space and 63 apartments above. Veroneau, who also led development of downtown Portland’s new Courtyard Marriott, was part of a video at the conference, during which he ticked off another four or five urban projects planned by fellow developers.
Tanya Emery, director of economic development for the City of Bangor, said that “the sure bet” in her city is medical office facilities. This sentiment was also echoed by an expert from the central Maine market, where a Chinese medical tourism facility is planned for a former Auburn shoe shop, and more traditional medical facilities are in the works as well.
Beyond medical, experts outside Portland also see growth opportunities in senior housing, as well as entertainment and industrial space located in close proximity to the state’s turnpike and Rte. 95.
“We are optimistic about commercial real estate in Maine for the coming year. Many of the promising accomplishments of 2015 continue to trend upward as we enter 2016,” said O’Reilly.