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March 1, 2024

Maine real estate wizards look into crystal ball, see mixed prospects for 2024

Photo / Alexis Wells From left, Aaron Bolster, president of Allied Realty; Elise Kiely, broker at Legacy Properties Sotheby's International Realty; and Brit Vitalius, principal at Vitalius Real Estate Group.

The annual look-ahead conference for Maine's real estate industry presented mixed predictions in many sectors, including hospitality, commercial, residential and multifamily projects. 

The Maine Real Estate & Development Association's Forecast Conference and Member Showcase, held Thursday in Portland, drew 800 people to the Holiday Inn by the Bay, the group said.

Some of the experts who led the day's discussions were enthusiastic about the prospects for Maine real estate.

"2023 was another astonishing year for commercial real estate, despite the chaos in the world," said Peter Harrington, associate broker at Malone Commercial Brokers. "2024 is a positive year for retail real estate. I am confident we will have another great year."

But there was ambivalence, too.

"Hospitality is boring right now," said Matt Arrants, founder and principal of the Arrants Co., addressing the Maine real estate market for hotels, restaurants and related businesses.

Here's a breakdown of what the presenters said. 

Retail and hospitality outlook

  • Retail sales up 5%
  • New construction will be impacted by high interest rates and high costs to build, keeping vacancy rates low and prices stable
  • Home sales are at a 30-year low with record prices, which will begin to impact retailers selling home-related products
  • Maine travel demand is not growing as it did in 2021 and 2022
  • The labor situation is getting better or more businesses are doing what they can with the employees they have

Residential and multifamily-property outlook

  • Interest rates have doubled and prices are still going up
  • The buyer market is slowing down; there was a dramatic increase in people coming to Maine during the pandemic
  • Price increases have slowed down in Portland, Saco, and Biddeford but increased slightly in Lewiston and Auburn
  • More people have moved to Maine than anywhere else, but the majority of the homes being sold are bought by Mainers
  • Unaffordability!
  • If you are looking to buy a home, go in with strong offers

Southern Maine industrial market outlook

  • Industrial geography expands
  • Tertiary markets leverages lack of inventory
  • Highway and utility/infrastructure access remains critical
  • Maine loses businesses out-of-state
  • Recruiting and development issues result in job opportunity losses

Southern Maine office outlook

  • Demand remains steady as office confidence returns
  • Opportunities emerge in some submarkets more aggressive than others
  • Grayspace develops more predictability and stability
  • Conversions show no signs of stopping, but perhaps slowing, at least on large-scale projects

Commercial real estate forecast: Brunswick/Topsham/Bath

  • Demand for industrial space pushes north of Portland 
  • Start to see build-to-suit deals and possibly spec development of industrial in the 10,000- to 30,000-square-foot range
  • Some of the downtown office vacancy starts to be converted to residential 

Commercial real estate forecast: Augusta/Waterville

  • Continued investment and development by Colby College
  • More investment in and around Augusta
  • Older downtown office buildings converted to apartments 
  • Demand for industrial space 

Commercial real estate forecast: Greater Bangor

  • Corporate investment near University of Maine Orono for talent recruitment 
  • Strong demand from industrial tenants 
  • Nonlocal buyers acquiring investment properties
  • National warehouse tenants seeking location as strategic hub location 
  • Consolidation of multiple locations
  • End of office vacancy downtown 
  • Conversion to apartments and multi-units 

Commercial real estate forecast: Northern Maine 

  • Two major redevelopments: the former Great Northern paper mill and the former Loring Air Force base

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