The 2022 MEREDA Index was recently released with our own Katie Allen contributing insights on the commercial sector. Often thought to be “the best baseline measure of Maine’s real estate market,” the MEREDA Index is a key economic indicator for the state of Maine. This edition of the MEREDA Index came in at 116.3, jumping 10.8% from 2020 to 2021. Zeroing in on the commercial sector, the Index reported a 9% growth. Known for her incisive market knowledge, Katie shared her boots-on-the-ground perspective for the commercial sector, with observations such as:
“Coming into 2021, we felt a sense of optimism that people would start coming back to the office. While this did happen on a small scale – predominantly in downtown offices – the Delta variant quickly changed people’s ‘back to work’ plans. Office tenants were all over the place and no one seemed to have an answer on how to effectively move forward. As a result of all this uncertainty, two major trends emerged. First, tenants with lease expirations in 2021 (or even later) whose employees could work from home, chose to abandon their space altogether. Second, tenants chose very short-term renewals as a way to kick the can down the road. Most landlords accepted these renewals, often on less than favorable terms, in order to keep vacancy down and to get a shot at future renewals. In my opinion, because of this, the real impact of Covid on the office market has yet to be seen.”
Check out Katie’s full commentary, the full Index report, as well as a video presentation at www.mereda.org.