Industrial & Office Mid-Year Review

The Greater Portland overall industrial vacancy rate dropped below 2% for only the 2nd time ever, continuing a decade-long bull run in the industrial market. The statistics as of July 1, 2021, are astounding and confirm our anecdotal and transactional workload. Today the vacancy rate for over 20,000,000 SF of industrial space is a paltry 1.98%. This is the first time since a very short period in 2017 when inventory has been so low. In the first two quarters of ’21, over 250,000 SF of space was absorbed.

Partner & Designated Broker, Justin Lamontagne, CCIM, SIOR, says in his review that “The industrial sector not only proved pandemic-proof, but the pandemic itself actually exacerbated the importance of industrial work. Essential businesses like food production, product warehousing and shipping, domestic manufacturing of PPE and general goods, got us all through this terrible year.”

Over the last 16 months many have contemplated, hypothesized, or even hoped for, the death of the office market. In Southern Maine and specifically Portland, the office market has been stagnant but certainly not dead or dying. In comparison to Boston or New York, Portland doesn’t see the drastic highs and lows of a primary market. Things are much more stable, and although we have seen lease term length go down over the course of the pandemic, pricing remains very similar to pre-pandemic levels. What used to be a standard 5–10-year lease term has more typically been 1-3 years in length, in order for both local businesses and corporations to be able to make decisions based on what post pandemic office space looks like.

Associate Broker, Sam LeGeyt , says in his review “a recent trend that we are seeing is the uptick of demand in small spaces, both downtown and in the suburban markets. Many users, and in particular those continuing to work from home, are flooding the market, for spaces to escape the home office.

Read the full Mid-Year Review at the link below.