Maine Industrial Market


The national economy is affecting the Maine industrial market just like every other market in the country. A level of caution and concern for the economy is keeping inventory from shrinking. Maine is also suffering from a lack of available land and rising construction costs, which is keeping prices high. Greater Portland land prices have continued to rise and currently range from $150,000 to $200,000 per usable acre. In addition, the recent introduction of Vernal Pool Regulations by the Department of Environmental Protection will undoubtedly push prices even higher as the regulations make less useable land available.

Despite these setbacks, new industrial development is occurring throughout this Northeastern state. The 103,000-square-foot Gendron Distribution Facility is currently under construction in Auburn; 73,000 square feet of this has already been committed. Phase I of the project will total 385,000 square feet. The high-bay efficient space will give companies more cube storage, and, more than likely, when people move to this region, smaller, less efficient properties will come on the market.

The majority of the new industrial development is taking place in the Lewiston/Auburn area or in the southern part of the state in Saco/Biddeford. This new industrial product is moving away from the Greater Portland area for a couple of reasons: the market is more pricey there and there is a lack of available land. Bisson Moving and Storage, Estes Trucking and others have picked Lewiston/Auburn for the region’s price, value and strategic considerations. With plenty of developable land and the existence of intermodel facilities, the region will be a huge draw for industrial developers and tenants. New developers to the state, such as Portland-based Landmarc Construction Services Corp., McCarthy Properties and Irishspan Industries, are hoping to capitalize on this need for more space in the near future.

Despite the signing of numerous new leases in the past year, landlords are keeping their options open in order to attract a broader range of tenants and are willing to offer concessions: if a tenant needs any specific build out, it can be negotiated into the lease.

Some major leases signed include L.L. Bean Inc. completing an 800,000-square-foot expansion, the lease of 150,000 square feet of space at 217 Read St. and 58,000 square feet at 150 Read St. in Portland, the lease of 58,866 square feet at 1400 Hotel Rd. in Auburn, and the lease of 40,000 square feet of industrial space at 85 Bradley Dr. in Westbrook.

Maine’s industrial rental rates have firmed up over the last two quarters after softening last year. Space under 10,000 square feet is seeing rates ranging from $5 to $6 per square foot, and larger space measuring above 10,000 square feet is experiencing a rate of $4 to $5 per square foot. Vacancy rates have increased only .5 percent from last year, and are now measuring 5.5 percent.

— Tripp Corson is an associate broker with NAI The Dunham Group in Portland, Maine.

©2007 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.

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