As Bangor’s downtown develops to accommodate people gravitating toward urban centers and a growing entertainment corridor, the city enters 2017 with another batch of large properties to fill and a need for affordable rentals.
Tanya Emery, the city’s director of community and economic development, said the city still has many large commercial and industrial properties to repurpose in a market where demand is highest for smaller commercial spaces.
That’s just one of the real estate trends Emery predicts will affect life in the city in the coming year, alongside densifying downtown development and a need for more affordable housing.
She plans to present a forecast of what’s ahead for the city to a Portland audience of about 800 developers and real estate professionals on Thursday, during the Maine Real Estate and Development Association’s annual forecasting conference.
That includes highlighting a few of the city’s larger vacancies, a list that will grow a little larger this year.
Preparing for the conference, Emery added the Bangor Mall’s Macy’s property and the KMart on Hogan Road to her presentation. The Verizon call center at 6 Telcom Ave. will join the list in March, and she said the downtown offices of the University of Maine are nearly vacant.
That adds to a list that includes the former Garelick Farms facility on Outer Hammond Street, a 6-acre complex formerly operated by Old Town Canoe and a former Emera Maine warehouse office and fleet maintenance facility on Main Street.
Filling those is in part a waiting game, Emery said, with owners holding out hope for finding just the right tenant before investing to break up a property to suit other uses.
But she noted that there’s been recent attention on finding unconventional tenants for large or industrial spaces, such as breweries or the trampoline park that moved into the former Ames Department Store last year. International investors have also expressed an interest in some properties, Emery said.
And interest has also started to spark for marijuana-related businesses, though Emery said the city’s focus remains on attracting businesses in aviation, back-office operations for companies and on the potential for the city to become an agricultural processing or manufacturing hub.
Emery said she sees the city’s potential in agriculture, but the big question will be whether it could scale up enough to expand beyond local production and distribution.
For the coming office space vacancies, she said larger properties are more likely to be divided for smaller tenants, rather than holding out for a tenant who can take the whole space.
Downtown, Emery said she expects new developments will continue to fill in, but it will remain a challenge to develop more affordable housing, a trend she attributed to people cashing out homes in the suburbs to move back into the city.
For some of the new downtown apartment developments completed recently, Emery said her department was surprised by the prices they fetched. At 28 Broad St., completed in March 2016, rents ranged from $2,200 to $2,500 per month, and units were filled by, among others, tenants working at the hospital, doctoral candidates at the University of Maine or by people from out of state.
Census data show Bangor’s population grew in the past five years, primarily in two age groups: young adults between 25 and 35 and seniors between 65 and 75 years old.
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At the same time, the rental market has tightened. Census data show that renter-occupied units jumped to 56 percent of housing units, up from 50 percent, when comparing household survey data covering 2011 to 2015 and 2006 to 2010.