Current Portland Office Market
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.
Tags: Commercial Real Estate, maine commercial real estate, NAI The Dunham Group