The strong office market throughout Greater Portland continued in 2018 as vacancy rates fell for the ninth consecutive year. A survey of 347 Class A and Class B office buildings, totaling just over 12.4 million s/f, in seven submarkets, found that the total vacancy rate, including sublease space, fell to 4.18%, down from 4.4% in 2017 and the lowest rate since 2000. Four out of the seven submarkets had a drop in vacancy with the remaining three showing little increase. Several large transactions shaped the majority of the movement in most submarkets, and the popularity of downtown Portland continues.
For the third year in a row I have the opportunity to consider the New Year’s forecast for the hospitality industry here in New England. In preparing for writing this article I reviewed my last two years and my expectations for the year ahead for both years were consistent and in line with my thinking. We were all watching our economy grow, stock market hitting record highs and hotel revenues benefitting by it. Well operated hotels throughout New England enjoyed very good years in 2017 and 2018.
Many of us don’t think about what will or won’t be covered by insurance until it’s too late. Whether due to unexpected catastrophic storms or less dramatic, relatively expected issues and incidents, buildings are susceptible to damages both inside and out. Those in the real estate business – buyers, sellers, managers and developers – can mitigate losses with some common-sense tactics and basic preparation. Preparing your property and your policies for the worst is the best way to face any storm.
New Hampshire’s Seacoast commercial real estate market experienced very high demand with low inventory and continued increases in construction costs in 2018. The vacancy rate remains low in both the office and industrial markets with the industrial market falling to 5.5%. Lack of inventory coupled with rising construction prices have forced businesses and investors to either pay premium sale and lease rates or get creative about their space, hold tight for a dip in the market, or in worst cases be forced to consider properties outside of the Seacoast.
In the year ahead, we are likely to see continued compression in project delivery schedules, spurring developers and designers to hunt for new ways to streamline the design and permitting process. Meanwhile, the regulatory maze is becoming increasingly difficult and constantly changing. As a result, the permitting process often represents the major obstacle to project delivery dates, even for relatively simple projects.
Despite all the powerful new technologies available to today’s design professionals, “working faster” can only accomplish so much. At every scale, environmental regulation has grown more complex. To be
2018 closed out as a very strong year for commercial real estate developers and investors partially fueled by continued low interest rates and ever-present demand. We enter 2019 amidst government tensions and political infighting with seemingly impending rising interest rates. That’s the bad news. The good news is that New England has an unprecedented demand for most asset classes including industrial properties and flex properties, especially inside of I-495. Multifamily demand hasn’t subsided even though some may believe that time may be needed to absorb some of the new units that came online recently. Even with the
2018 proved to be a refreshing year in terms of new companies entering the New Hampshire market and the continued trend of existing businesses and entities expanding their footprints. Will 2019 continue these positive trends? The media is fixated on what the Fed has planned, the “China trade talks,” etc. and what impact that will have on the economy. The significant drop in most of the global stock markets has many economists suggesting that a recession is on the horizon. From our perspective, the state’s commercial real estate market will remain strong in 2019. The challenges will likely be more “supply – demand”
As start-up and operational costs in the hospitality industry increase, food halls and “micro-tenant” aggregation continue to gain popularity in New England’s urban commercial real estate markets. From Boston Public Market to the recently introduced High St. Place (Boston Financial District), Lisbon’s Time Out Market (Fenway’s Landmark Center), or Bow Market (Union Sq. in Somerville), real estate developers are banking on vast multi-operator ventures to drive business and hedge risk among various operators. New England is likely to see this concept flourish in 2019 with several such developments currently underway.
Plenty of Capital Still Available
The Mortgage Bankers Association recently published its Commercial Real Estate Outlook Survey 2019. The r...
We have now started the year 2019. What will the New Year mean for the real estate industry? The month of December was one of anxiety and concerns with the stock market ups and mostly downs, the controversy over interest rates and the tariffs making headlines. Are we in for a recession? Many said at the start of 2018 that 2019 would be the year the economy sputters and we see the next recession.
Looking at the economy around the world there are some signs of a slowdown. In China, the key private sector index that looks at manufacturing showed activity shrinking in November, the first time since 5/17,
