NORTHEAST SNAPSHOT, JANUARY 2008
Maine Multifamily Market
The multifamily market in Maine remains steady. Investment prices have lowered slightly, but there are still many investors actively looking for properties that have good financials. Sellers have become more motivated and the inventory of properties for sale has increased.
Historically, Maine has enjoyed lower vacancy rates than the national average, and as mortgages have become harder to obtain many people have turned back to leasing rather then purchasing a home. Rental rates in Maine range dramatically depending on the location, class of the property and amenities offered.
In Portland, rental rates for a two-bedroom apartment range from $800 to $1,400 per month. As the U.S. grapples with the state of the credit markets, many large-scale housing projects in downtown Portland have been halted or downsized in the last 2 years. Most recently in the Bayside area of Portland, a local developer announced that he was no longer going to build a 64-unit apartment/ condo building. This project was also slated to include 80,000 square feet of office space and a 700-space parking garage.
In Maine there has been little growth over the past year, and many areas have experienced a decline in activity. However, there is still a fair amount of projects under development in southern Maine. Many of the developers constructing multifamily projects in the area are locally based, but investors from other states are finding Maine a desirable place to build. Plum Creek Timber Company, a Seattle, Washington-based REIT, has proposed a massive development project on Maine’s well-known Moosehead Lake.
The proposed project, which has sparked a state-wide debate, would include a resort component with more than 1,000 accommodations as well as 975 housing lots. The REIT also announced that in conjunction with the development, it will donate 100 acres for affordable housing units that would be available for area residents as well as the company’s employees. Scarbourgh also has many opportunities for investors who are looking for long-term investments and are willing to hold development sites until the market stabilizes and demand rebounds.
— Michael Cardente is a sales agent and the financial manager for Cardente Real Estate in Maine.
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