MEREDA forecast conference presents mixed outlook for 2023

MEREDA's 2023 Real Estate Forecast Conference offered a mixed look at the real estate market for the year. Coming off two red-hot years, the real estate forecast becomes a bit more nuanced going into this year.

In his presentation on retail in Greater Portland, Peter Harrington, a partner with Malone Commercial Brokers, offered a bullish industry outlook.

Dismissing concerns over the last year or two about retail being dead, Harington said, “I’m here to tell you … that’s simply not true.”

Out of 6.6 million square feet of retail space in Greater Portland tracked by his firm, close to 280,000 square feet, or 4.23%, is vacant. 

Vacancy rates range from zero in Cape Elizabeth (albeit with only 34,735 square feet) to 16.3% in Westbrook, which Harrington attributed to the closure of a Shaw’s Supermarket across from Market Basket, “a tough competitor.” 

But he said Westbrook remains strong for retail both downtown and at Rock Row, noting that “it’s all going very well out there.”

Harrington was also upbeat on the Maine Mall, which he said is “morphing into a new retail showcase” in South Portland amid several upcoming openings, including a Lululemon store.

“It’s not Apple,” Harrington said of the athletic apparel retailer, “but it’s almost as good a draw.”

On a more general note, Harrington predicted another strong year for retail but pointed to rising interest rates and consumer sentiment as risk factors.

To read the full article from MaineBiz, click HERE.

2023 Forecast: Office market is strong overall, but uncertainty continues

The biggest variable in commercial real estate over the past year has been commercial office space. That’s likely to continue through 2023, says Joseph Malone, founder and president of Malone Commercial Brokers in Portland.

“Office is the weak spot,” he says. “Many people still have not returned to the office.”

There’s been significant downsizing among some larger users, particularly national tenants.

“I think that trend will continue in 2023, making office space the most unstable segment of the commercial industry, particularly in the suburban market but, really, everywhere,” Malone says.

And the ripples from fewer office users trickles down to support businesses around them. But downtown Portland seems to be something of a beneficiary of some of the downsizing.

“Some suburban tenants have looked at coming downtown, taking less square footage for a higher-end office space,” he says. “So downtown Portland has held up better than some of the southern Maine market.”

Developers are scouting out office buildings, particularly in downtown Portland, as conversion opportunities for hospitality and residential use. That’s likely to continue, he says.

More broadly, the industrial market has been holding up well and is likely to continue that way.

Retail real estate has been surprisingly strong. “It’s been more stable than I expected,” he says.

Also likely to continue is condominium and apartment development. “I think the inventory is still below market, despite the fact that construction costs are so high,” he says. “There seems to be an appetite for additional units and developers are still meeting that. It’s slowed a bit, but it’s still pretty strong despite high interest rates.”

The overall outlook? “There’s more caution but, right now, the market is pretty steady,” says Malone.

To read the full article from MaineBiz, click HERE.