PORTLAND, Maine — A slate of annual reports delivered by economists and real estate experts Thursday showed Greater Portland’s job growth and plummeting vacancy rates are helping to fuel a rebound in Maine’s economy.
Michael Dolega, a senior economist with TD Bank, offered his statewide economic forecast during the Maine Real Estate and Development Association’s annual conference.
The Maine Real Estate and Development Association conference has grown to become a repository of key economic indicators and forecasts monitored by journalists and business leaders.
At this year’s event, held Thursday in Portland, real estate professionals were bullish on what the immediate future holds for Greater Portland, where they said vacancy rates have dropped precipitously.
Those reports fed into a larger statewide picture that Dolega described as promising, boosted by the rapid addition of jobs in Portland.
Justin LaMontagne, of NAI/The Dunham Group, delivered the conference report on the industrial real estate market for Greater Portland, which found vacancy rates falling annually from 7.86 percent in 2011 to just 4.12 percent in 2014.
The 2014 figure for the Portland area was half the nationwide industrial vacancy rate of 8.2 percent, and almost a third of Boston’s industrial vacancy rate of 11 percent, according to LaMontagne’s report.
The Greater Portland properties are finding occupants without having to undercut out-of-state competition price-wise, he said, noting that the area’s $5.61 per square foot lease rate is higher than Boston’s $5.35 per square foot rate and similar to the average $5.68-per-square foot rate throughout the Northeast.
Mark Malone of Malone Commercial Properties said retail vacancies in Greater Portland are running at less than 3.7 percent, significantly lower than the national average of 9.7 percent.
Those Greater Portland vacancy rates — which include rates of 0 percent in Cape Elizabeth and 1.3 percent in Westbrook — are carrying the state while many other towns struggle, Malone’s report suggested. The retail vacancy rate in Brunswick stood at 16.4 percent, and nearby Freeport saw 10.5 percent, he said.
And while Nate Stevens, a broker with CBRE/The Boulos Co., told conference attendees downtown Portland and Westbrook vacancy rates for office space remain stubbornly high, southern Maine as a whole showed a direct vacancy rate of 7.64 percent, led by suburban office vacancy rates nearly one-third lower than those found in northeast competitors Boston, Hartford, Connecticut, and Providence, Rhode Island.
Brit Vitalius, president of the Southern Maine Landlord Association and head of Vitalius Real Estate Group, reported that sales of multifamily residential buildings increased by 75 percent in Portland and 136 percent in South Portland from 2009 to 2014.
Of the places Vitalius looked at — a group which also included Westbrook and Biddeford-Saco — only Lewiston-Auburn showed a decrease in multifamily building sales over that five-year stretch, with sales dropping 14 percent in that time.
Similarly promising was a Thursday report by Daren Hebold of LUX Realty Group on the state of Maine’s hospitality industry. Hebold said that despite an explosion in new hotel development — primarily in Portland, where 796 new rooms have either recently been added, are under construction or are planned — the average revenue per available room in Maine is expected to continue to grow to $69.70 in 2015, up from just more than $50 in 2009.
The overall positive trajectory described by the real estate experts at the conference Thursday bolstered a report by TD Bank economist Dolega, who told attendees 2015 could be the best year yet in the state’s recovery from the Great Recession.
Dolega reported that Portland’s low unemployment rate of 4.7 percent leads the state, with Lewiston filling up jobs nearly as fast at 5.4 percent, while Bangor hovers at 6.5 percent — closer to the statewide unemployment rate of 6.7 percent.
Dolega said low gas prices and interest rates should help Maine’s gross domestic product grow by between 1.5 percent and 2 percent in 2015, led by a jump of more than 2 percent in Portland, which accounts for an outsized share of the state’s economy.
The economist said he expects Maine payrolls to reach pre-recession peaks by the middle of 2016. He said Portland’s job growth is maintaining a “robust” pace of 1.6 percent, and he noted that the city has replaced nearly all of the roughly 14,000 jobs it lost during the recession, a bounce-back that paces the state.
While nearly 47 percent of the statewide job losses during the recession were in Maine’s largest city, Dolega said Portland is responsible for nearly 80 percent of rebound, offsetting what he called “lagging” job gains in Lewiston and “nonmetro counties.”
Dolega reported that Maine added 7,000 new jobs in 2014, the state’s sharpest increase since 2000.
