Bob Martin introduced Justin Lamontagne, a Portland Rotarian, and a partner with NAI The Dunham Group. His presentation centered on the commercial real estate market from the big-picture perspective. Commercial real estate includes three types of properties (a) industrial (b) office and (c) retail; Justin is an Industrial Office Specialist. Also included was some information about “Peninsula/Old Port Developments.” Other commercial real estate includes hospitality, like hotels. Commercial real estate works with property owners and businesses to find space to buy or sell. In the commercial market, about 70 percent of consulting with clients are advising them about property values. In the industrial real estate market, the property inventories are tight and it’s having a deterrent impact on economic growth.
Since 2011, the rents and the sale prices of commercial rentals and sales have risen. Industrial vacancy rates are declining and are under five percent. Driving this market are craft beer-making and legal medical marijuana growers. Unfortunately, new construction has not kept up with the demand and one reason is because banks will not provide cash to medical marijuana growers.
In the office properties market, the nicer spaces are gone. A recommendation is for class B office space to invest in property upgrades to attract tenants. Medical office space requires a “Class A” space to comply with quality regulatory requirements. Office space design is changing....now created for efficiency. Office space is shrinking. Maine has mixed-use space and unused industrial space with high ceilings. Although there is some new building in office properties, the rents on new construction are top of the range.
Retail and e-commerce are impacting bricks and mortar stores. People are changing how they shop.
During the 2007 Recession, the dark space left as a result of the economic downturn is quickly being reabsorbed. Customers must brace for an increase in the cost of properties when leases are renewed. In the Old Port and Peninsula, the market is primarily about hotels and condos. Parking for employees and consumers continues to be a challenge for all who want to do business in this area of Portland.
Justin encouraged Rotarians to learn more about two questions on Portland's election ballot this November related to real estate: one is about rent controls and the other about residents’ influence over zoning..JPG)
(Photo L-R: Justin Lamontagne, Bob Martin and President Don Zillman.)