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Todd Spencer's phone has been ringing off the hook. Spencer is the property manager for Lewiston-based real estate owner, developer and contractor Gendron & Gendron, whose owner and president, David Gendron, owns close to 2 million square feet of industrial space, along with retail and office space, most in the Lewiston/Auburn area.
Prospective tenants are coveting that space — a combination of buildings either purchased or developed by Gendron & Gendron. Demand for warehouse space, in particular, is hot, Spencer says.
“I've got more phone calls and we're in the grind with more people in the last four to six weeks than in probably the past four years,” says Spencer.
Lewiston and Auburn have about a dozen industrial or business parks.
The significant real estate activity includes the purchase of the former 120,000-square-foot recycled paper processing plant, which the Canadian company Cascades Inc. closed last year. The plant, at 586 Lewiston Junction Road in Auburn, was snapped up after just two weeks on the market. For now, it is not clear what the site will be used for.
Companies taking over more space range from L.L.Bean, which needs additional space to accommodate the surging popularity of its Bean boots, to companies that make components for medical devices to a company that provides crane-and-rigging services.
The keen interest is tightening existing inventory, says Tom Dunham, partner and broker at the Portland-based NAI The Dunham Group.
“The inventory is getting tighter, likely around 3%, and values are now increasing both in sale prices and rents,” says Dunham.
Unlike greater Portland, L/A has room to grow, if developers decide to build more industrial space.
Kevin Fletcher, with Portland-based Malone Commercial Brokers, sees L/A's industrial market benefiting from the tight market for industrial real estate in the Portland area.
“People are starting to look at Lewiston/Auburn rather than just southern Maine and the Greater Portland market,” says Fletcher. “That's something Lewiston/Auburn has been poised for in the last several years — to take advantage of the tightness of the market down south.”
L/A's advantages, Fletcher says, include available land for construction and the two cities' streamlined permitting processes. In addition, L/A is handy to the Maine Turnpike and has the Auburn Lewiston Airport; and Auburn is home to Maine's largest intermodal cargo terminal, a hub for the St. Lawrence & Atlantic Railroad that runs through Auburn between Portland and Canada. L/A is also central to Portland, Augusta and Bangor.
Fletcher is handling the marketing for one of L/A's newest industrial parks, the Auburn Enterprise Center. Owned by the Auburn Business Development Corp. and developed in partnership with the city of Auburn, it comprises eight build-ready sites and comes with incentives like reductions to international trade tariffs and state taxes.
“I've already got two or three developers eyeballing building on spec there,” he says. “The developers are from Lewiston/Auburn, seeing the same opportunity I do. I think you'll see ground-up speculation in Lewiston/Auburn — and I think the market is ready to demand it.”
Lewiston/Auburn's geographic advantages have made it a hub for transportation and logistics companies, which has spurred the development of industrial parks in both cities to accommodate, among other uses, numerous companies investing in warehousing and distribution facilities.
In 2005, Wal-Mart built an 850,000- square-foot food distribution center on 117 acres at 31 Alfred A. Plourde Parkway, just down the road from where Gendron had completed Phase 1 of a new business park a year earlier.
Lincoln Jeffers, director of the Lewiston Economic and Community Development Department, credits Wal-Mart's arrival with spurring interest from other companies interested in setting up warehouse-distribution centers in L/A.
That resulted in Gendron Business Park filling up within two years. Now Phase 2 is starting on the park's remaining 150 acres, which can accommodate 1 million square feet of development, if a tenant wanted it.
At the 80-acre Auburn Industrial Park, which was established in 2008, there is still room for an additional 220,000 square feet of industrial space.
The additional space would likely be welcomed.
“What I hear in conversations every day from commercial brokers is that the Portland market is pretty close to capacity,” says Spencer. “They can't make land and once it's gone, it's gone.”
Long-time observers like Fletcher predict interest in L/A will grow.
“Lewiston/Auburn is a fairly robust industrial market and there's demand for space that will warrant new construction speculation,” says Fletcher. “It may be a little premature to say, but I think by the end of the next six months we'll see new prospects.”
“It starts first with what's happening at home,” says Scott Benson, economic and business development director for the Lewiston-Auburn Economic Growth Council.
Benson explains that much of the current industrial real estate growth is being undertaken by companies already in L/A.
“We're seeing an increase in square footage and an increase in jobs from industrial-based companies that are already here,” he says. “We've had what I consider to be three pretty significant expansion announcements just in the last year — L.L. Bean, Clariant and Compounding Solutions.”
While those and other expansions over the past year have been pretty big, the majority of interest is coming from small companies seeking spaces of 10,000 square feet or less, which doesn't come readily without new construction, says Benson. “We're talking about small shops, innovators, people doing industrial work but on a small scale — the one-, two-, five-guy shop that needs a small space to set up a CNC machine or whatever it might be,” he says.
And L/A is poised to draw companies from beyond the region, he says.
To that end, in 2016, LAEGC launched a campaign, with consultants, to identify and recruit Atlantic Canada companies that are growing and have an interest in developing a presence in the U.S. Northeast.
“We met with 30 to 35 businesses to make the case for Lewiston/Auburn,” says Benson.
Plans call for continuing the campaign into 2018, and also include domestic targets. “I believe it can be a vital piece of the overall economic development approach for these two cities, to have a salesman out there pounding the pavement, creating brand awareness, learning what the need is and solving problems. We're not going to pull them in one right after the other. But we have a lot of comparative advantages, as evidenced by the vital business community that's already here.”
L.L.Bean is one company finding that large spaces in Lewiston are scarce. The Freeport-based retailer is also expanding. Since 2007, it has used two sites to manufacture certain products, including the signature Bean boots, dog beds and tote bags. The sites were in Brunswick and in leased space on Lewiston's Westminster Street.
“But our lease is up and, at the same time, we were looking to expand production of the Bean boot and therefore expand the facility,” says public affairs manager Carolyn Beem. The search, which took close to a year, ended at the 106,000-square-foot former VIP Auto site, at 12 Lexington St. Fit out should be completed this summer. The new facility is double the size of the existing plant and better laid out for production and warehousing.
The expansion, Beem says, is backed by a surge in the Bean boot's popularity. The expansion is expected to boost the manufacturing division's workforce by about 100, up from 500 across manufacturing plants in both Lewiston and Brunswick. Last year, the company sold more than 600,000 pairs of Bean boots and expects to sell 700,000 pairs this year.
“We were fortunate to find the space we wanted in the area we wanted. We like being in Lewiston, with its long history of manufacturing,” Beem says.
Another growing company that needed more space was Connectivity Point Design & Installation in Auburn.
“Our business needs had grown to the point that we really needed a loading dock and space to receive and accommodate large material orders,” says Connectivity President Doug Watt.
The company designs and installs network cabling and provides audio/visual equipment, surveillance, security solutions, wireless networks and telephone systems. Today Connectivity Point/The Connectivity Group has more than 115 employees spread between Bangor and Boston.
Watt based the company in Auburn because some key hires are from L/A. But the facility's 2,500-square-foot warehouse and small parking couldn't handle the tremendous growth and need for expanded shipping and receiving space.
“We were receiving deliveries from tractor-trailers that had to stop on Washington Street and back into our parking lot. It was dangerous for our employees and the delivery drivers,” he says.
Watt worked with brokers Justin Lamontagne and Brad Moll, from NAI The Dunham Group, who found an 8,000-square-foot warehouse with a loading dock, not far away, that suddenly popped onto the market.
“We snapped it up,” Watt says. “It's given us breathing room until we figure out what to do next.”