Available space in Portland-area industrial zones has become increasingly scarce over the past few years, in part because industrial properties have become desirable spots for breweries, medical marijuana providers and other small businesses, according to a real estate analyst speaking at Thursday’s Maine Real Estate & Development Association conference in Portland.
Commercial real estate broker Justin Lamontagne of NAI The Dunham Group in Portland said the vacancy rate for commercial properties in greater Portland’s industrial zones was just 3.4 percent at the end of 2015, down from an already tight 4.1 percent a year earlier. December’s vacancy rate was less than half the rate for office properties in the Portland metro area.
Still, the ultra-low vacancy rate did not spur new construction or cause the price of rents to increase, Lamontagne said. Lease rates in greater Portland averaged $5.62 per square foot per year plus property tax, insurance and maintenance costs, less than both the U.S. average of $5.88 and the Northeast regional average of $5.71.
Still, Lamontagne predicted that speculative development will occur in 2016, increasing the availability of industrial space, and that lease rates will climb above $6 per square foot.