Office Market Update

Overall, the Greater Portland Office market remains stable. There are currently over 1.5MM square feet of office space available for lease in the Greater Portland market. While this sounds like a large number, the vacancy is primarily concentrated into several large buildings located along the Congress Street corridor. The approximate average asking lease rate for office space is currently $15.00/SF. Landlords appear to be achieving their asking rates, however the time it takes to actually fill these spaces is increasing. The average number of days a listing will stay on the market in Greater Portland is 272. So while it may still be a Landlord’s market overall, Landlords should not anticipate spaces to fill up quickly. This indicates a continuation of a very common theme for the Greater Portland office market; price is much less of an issue than demand.

For the first time in a very long time we are seeing new construction of multiple office buildings on the peninsula. New office and mixed-use projects are and will be popping up on Fore Street, Middle Street and Commercial Street. With asking rates of over $25.00/SF NNN, it will be interesting to see how long it takes to fill these new projects. There may be a flight to quality for businesses that are already paying Class A rates but want something more modern and up to date.

(Download Katie’s Full Update)