The biggest challenge to the Portland office market is unemployment. Maine’s unemployment rate is running about 8.6 %. Couple that with a national rate of 9.6 % and it is no surprise that the vacancy rate in Portland is increasing at a steady rate. Most of the activity in this sector has been limited to tenants seeking to reduce their space requirements. This is due in part to the consolidation that has taken place in the financial and insurance industries and the overall reduction in personnel across the service sector. We are estimating the current vacancy rate in the greater Portland area at 12%. On the investment side we have seen office properties trading at 10.5% cap rates up from their lows in 2007 of 7.5%. This due to the concerns over current occupancy trends and the lack of financing for these transactions. We are starting to see distressed properties coming to market. For those with cash there could be some real opportunities.

On September 25, 2009, the property at 362-382 Riverside Street, Portland was sold by the United States Postal Service to A. Hausmann Associates, Inc. (Art Girard). Greg Hastings, SIOR and Tom Dunham, SIOR from NAI The Dunham Group brokered the deal on behalf of the Seller and Buyer.

Located less than 1 mile from Exit 48 of the Maine Turnpike, the Riverside Street property consists of high bay warehouse, office, and mezzanine space totaling 80,000± SF on 9.6± acres. The owner is currently fixing up the property and offering it for sale or lease. The building is subdividable down to 9,000 SF with lease rates as low as $2.95/SF NNN. There is paved parking for over 170 vehicles. The property was originally constructed as a corporate headquarters for Nelson & Small in 1986. The USPS purchased the property in 1992 and redeveloped it for district administrative offices and a mail sorting/postal carrier division.

June 2009: Pratt & Whitney renewed their lease for 972,625± SF of manufacturing space at 113 Wells Street in North Berwick from Newkirk Seguine, L.P. Thomas Moulton, CCIM, SIOR from NAI The Dunham Group brokered the lease on behalf of Pratt & Whitney.

Pratt & Whitney, a United Technologies Corp. company, is a world leader in the design, manufacture and service of aircraft engines, industrial gas turbines and space propulsion systems. The company serves as a substantial employer for the area and has renewed their lease on a long term basis. The manufacturing and service building in North Berwick has been occupied by Pratt & Whitney for decades.

On July 10, 2009, 390 Congress Street and 385 Congress Street, Portland were sold to Metro Media Properties, LLC, whose principal is John Cacoulidis, by MTM Portland Properties, LLC. Thomas W. Moulton, CCIM, SIOR, a partner at NAI The Dunham Group brokered the deal on behalf of the Purchaser.

Located on the corners of Exchange, Congress and Federal Streets, 390 Congress Street encompasses two buildings (built in 1925 and 1945) totaling over 84,000 SF and .23 acres. Just across the street and connected to 390 Congress by an underground tunnel, 385 Congress Street (built in 1965) encompasses over 76,000 SF and 2.26 acres. 390 Congress Street has served as the center of Portland’s print media industry and was home to the Portland Press Herald and its predecessors for over 85 years.

Metro Media Properties, LLC, a New York based firm with strong ties to the area, has yet to finalize any formal redevelopment plans for the buildings. However, both buildings will undergo substantial renovations and will be part of a high quality, environmentally conscious, mixed use development. Completion time will depend on the extent of the development and necessary approvals but is slated for Fall of 2011.