NORTHEAST SNAPSHOT, MARCH 2007

Maine Retail Market

Retail development is ruling the roost in Maine. Developers such as W/S Development, Packard Development and Great Island Development are aggressively developing within Maine as consumers demand more retail opportunities. The majority of the development is taking place in southern Maine along the Maine Turnpike corridor where an overall population of approximately 500,000 is located. The trend in retail development is moving towards more open-air shopping centers rather than traditional-style malls, especially throughout southern and central Maine.

W/S Development is currently expanding The Marketplace at Augusta in Augusta. Situated just 60 miles north of Portland directly off the I-95/Maine Turnpike, this retail hub will be the largest open-air shopping center in Maine with 1.3 million square feet of retail space. Major tenants include The Home Depot, Kohl’s, Sam’s Club and Wal-Mart, as well as several other national shops and restaurants. Once complete, the center will be larger than the Maine Mall in South Portland.

Walgreens began opening stores in Maine in 2006 and have also been expanding in the outlying areas of Portland. In addition, many smaller communities have seen the addition of Wal-Mart, Lowe’s Home Improvement and Kohls. The smaller secondary markets are seeing the infill of retail space with the addition of smaller format grocery stores and Wal-Marts under construction as small as 145,000 square feet. Cabela’s, a sporting goods store, will locate its first Maine store in Scarborough, putting the 150,000-square-foot store in direct competition with L.L.Bean’s flagship store.

In addition to retail development, a number of residential condo developments have been approved in Portland recently, but are not under construction. There is also not any speculative office development in the works in the greater Portland area despite the fact that office vacancy is as low as 2.5 percent in the Greater Portland suburbs and 6.98 percent in the greater Portland downtown area. Rental rates range from $18 per square foot to $26 per square foot on a modified gross basis.

Overall, retail is leading the charge with new anchored neighborhood shopping centers in Biddeford, Augusta, Auburn and Bangor, and the office market has grown by 1 or 2 percent. Growth should slow, as most communities are now well retailed and only smaller format stores can be justified by national tenants. With the Maine population growing at only 1.2 percent per year, absorption of any new space will be relatively slow.

— Daniel Greenstein is a partner and vice president at CBRE/The Boulos Company in Portland, Maine


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