Warehouse shortage fueled by nontraditional uses
PHOTO CREDIT / PETER VAN ALLEN
Justin Lamontagne, a commercial broker at NAI The Dunham Group speaks at the MEREDA conference on Jan. 21. Lamontagne spoke about the high demand Portland faces for industrial spaces.
Beer brewers, coffee roasters and medical marijuana companies are taking over more warehouse space in Portland, driving demand and the price per square foot, a speaker at the MEREDA conference said on Jan. 21.
Justin Lamontagne, a commercial broker at NAI The Dunham Group who specializes in industrial space, made his remarks in an early session at the Maine Real Estate & Development Association’s 2016 Annual Real Estate Forecast Conference, which was attended by 800 people at the Holiday Inn by the Bay.
Lamontagne said warehouse space was already at a premium in Portland, with many traditional warehouse users looking to other markets for space. Lamontagne echoed a phrase he has used in the past, citing the city’s “stunning lack of inventory.”
“We are full. We haven’t added supply. We have had no new construction,” he said. Even if a larger out-of-state producer was interested in moving into the market, there would not be enough industrial space to accommodate it, he added.
That’s the bad news.
The good news is that some fast-growing companies — including Rising Tide Brewing (one of Maine’s fastest growing companies), Foundation Brewing Co. and Bissell Brothers — are creating additional demand for the space. Add to that coffee roasters and rapidly expanding medical marijuana concerns, and the demand for small- to mid-sized spaces is growing.
The price per square foot of warehouse space is going up, but Lamontagne is also seeing bidding wars.
Echoing Gordon Gecko, he added: “Cash flow is king.”
In at least one case, Class A space traded at $80 a square foot.
“That’s the highest I’ve seen in my career,” Lamontagne said.
Industrial users are looking to Saco, Biddeford, Lewiston-Auburn and other markets for space.
“Manufacturing is up,” he said, adding: “You need places to make it, store it, ship it.”
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