Southern Maine

OFFICE FORECAST

2018

Nate Stevens Associate Broker

THE MARKETOVERVIEW

12.1.2017 Total SF

12,096,48612.1.2016 Total SF

11,904,986 191,500 SINCE 2016

PORTLAND DOWNTOWN

4,335,200

MAINE MALL AREA

2,054,193

SUBURBAN PORTLAND

1,881,761

FALMOUTH, CUMBERLAND &

YARMOUTH

1,043,195

MEDICAL

1,276,792

SCARBOROUGH

878,826

WESTBROOK

626,519

SUBMARKET SIZE341

Buildings Surveyed

MEREDA’s 2018 Annual Forecast Conference

Southern Maine Office Forecast | Nate Stevens

Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference

THE MARKETBUILDINGS ADDED IN 2017 191,500 ± SF TOTAL

705 US Rte One, Yarmouth 35,000± SF

16 Middle Street, Portland42,000± SF

1 Tyler Drive, Yarmouth 94,500± SF expansion

97 Technology Park Dr, Portland20,000± SF

MAINE MEDIA COLLECTIVE

Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference

4.41%THE MARKETHIGHLIGHTS

• 363,486± SF positive net absorption

• Low supply continued

• Class A: Landlord market Class B: Tenant market

• Transaction volume decreased

• Large transactions shaped the market

• New construction took shape

Total Market Direct Vacancy for 2017 is 4.41%

Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference

THE MARKETVACANCY RATES Downtown vs Suburban

DOWNTOWN

14

12

10

8

6

4

2

02012 2013 2014 2015 2016 2017

CLASS A

CLASS B

14

12

10

8

6

4

2

02012 2013 2014 2015 2016 2017

SUBURBAN

CLASS A

CLASS B

Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference

TRANSACTIONSSIGNIFICANT TRANSACTIONS - DOWNTOWN

SUBLEASE - 12,761± SFOne Monument Square, PortlandCertify Drew Sigfridson, SIOR - CBRE | The Boulos CompanyJustin LaMontagne - NAI / The Dunham Group

LEASE - 90,000± SFHancock Street, PortlandWEX Thomas Moulton - NAI / The Dunham GroupCharlie Craig - NAI / The Dunham Group

Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference

TRANSACTIONSSIGNIFICANT TRANSACTIONS - SUBURBS/MEDICAL

134,349± SF SALE Maine HealthOne Riverfront Plaza, WestbrookCharlie Craig - NAI / The Dunham GroupJoe Malone/Jen Small - Malone Commercial Brokers

30,000± SF LEASE WEX75 Darling Avenue, South PortlandGreg Hastings - NAI / The Dunham GroupFrank O’Connor - NAI / The Dunham Group

19,435± SF LEASE Maine Health265 Western Avenue, South PortlandDrew Sigfridson, SIOR CBRE | The Boulos Company

24,000± SF LEASE Intermed50 Foden Road, South PortlandFrank O’Connor NAI / The Dunham Group

11,068± SF LEASE FedCap Rehab Services220 Maine Mall Road, South PortlandMike Anderson Malone Commercial Brokers

25,000± SF LEASE Clark Insurance1945 Congress Street, PortlandRoxane ColeRoxane Cole Commercial Real Estate

10,038± SF SALE NE Foot & Ankle (St. Mary’s)117 Auburn Street, PortlandKevin McQuinnLux Realty

Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference

TRANSACTIONSSIGNIFICANT OFFICE INVESTMENT SALES

82 Running Hill Road, South Portland120,000± SF $17,900,000Charles Day - CBRE | The Boulos CompanyTom Moulton - NAI / The Dunham Group

63 Marginal Way, Portland27,740± SF $5,400,000Charles Day - CBRE | The Boulos CompanyJoe Porta, SIOR - CBRE | The Boulos Company

280 Fore Street, Portland69,481± SF$21,500,000

Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference

0.00%

0.02%

0.04%

0.06%

0.08%

0.10%

0.12%

0.14%

97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17

Vacancy Rate

‘97 ‘99 ‘01 ‘03 ‘05 ‘07 ‘09 ‘11 ‘13 ‘15 ‘17

279,000± SF

NEW CONSTRUCTION 172,500± SF

NEW CONSTRUCTION

198,000± SF

NEW CONSTRUCTION

198,000± SF

NEW CONSTRUCTION

LOW VACANCY = NEW CONSTRUCTIONNEW CONSTRUCTION

Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference

NEW CONSTRUCTIONUNDERWAY

0 Hancock Street Portland100,000± SF90,000 leased to WEXFall 2018

Widgery Wharf Portland18,000± SFTop floor leased to FL PutnamLate 2018

Ocean Gateway expansion Portland12,500± SFThree floors of office space added to garageSpring 2018

1945 Congress Street Portland40,300± SF in two buildingsClark Insurance & Diversified PartnersSpring 2018

170,800± SF

Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference

NEW CONSTRUCTIONPLANNED, PERMITTING, PRE-LEASING

Portland Foreside PortlandUp to 120,000± SF

Fisherman’s Wharf Portland45,000± SF

170 Fore Street Portland45,000± SF

One Union Wharf Portland14,815± SF

307,276± SF

Thompson’s Point Portland60,410± SF

266 Commercial Street Portland22,051± SF

Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference

NEW CONSTRUCTIONPOTENTIAL DEVELOPMENT SITES ON THE HORIZON

???± SF TOTAL

Bayside, Federated Companies site, Portland

Johnson Road, Portland

Portland Square, Portland

385 Congress Street, former Press Herald, Portland

West Commercial Street, JB Brown lots, Portland

100 Fore Street, Portland

Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference

CONCLUSIONSGREATER PORTLAND’S OFFICE MARKET HISTORICAL DIRECT VACANCY RATES

DIRECT VACANCY533,390± SF

4.41%SUBLEASE24,826± SF

0.21%TOTAL558,216± SF

4.61%

Southern Maine Office Forecast | Nate Stevens MEREDA’s 2018 Annual Forecast Conference

CONCLUSIONSPREDICTIONS

• Demand stays relatively low as office users get creative

• Older, unimproved products continue to struggle

• New construction downtown to create opportunities elsewhere, more supply?

• 2-3 new office buildings in Greater Portland, 1-2 in downtown Portland

• Relatively flat vacancy rate

• Medical office continues to be market driver

Nate StevensAssociate Broker207.553.1702 D207.272.2385 Cnstevens@boulos.com

One Canal PlazaSuite 500Portland, ME 04101207.772.1333www.boulos.com

Special Thanks:

Jessica Estes Michelle Peacock