Overall Office Vacancy down in Portland and Suburban Markets
Vacancy is down in Portland and most notably in the Suburban market. As of the end of 2017, Suburban Class A office vacancy decreased from year-end 2016 at 8.0% to 2.6% due to Maine Medical Center’s purchase of 140,000 SF at One Riverfront Plaza, Westbrook (June 2017, Class A Office Building). There is currently no planned new construction of Suburban Class A office space. The closest Suburban Class A proposed construction project is Thompson’s Point (approximately 60,000 SF of office).
The downtown market also saw a drop in vacancy from year-end 2016 at 5.2% to year-end 2017 at 3.8%. With this drop in vacancy, there have been a lack of large office floor plate availabilities.
2018 Outlook – Suburban Class A Vacancy Increasing
We expect within the next 12-15 months there will be significant vacancies in the Suburban Class A market that we project will increase the vacancy to around 10%. The first large user is Unum, located at 2211 Congress Street, who own their building and are looking to consolidate and lease up to 165,000 SF of space this Fall. In addition to Unum, Wex will be moving their headquarters to the East End Waterfront in Portland, vacating around 67,000 SF at 225 Gorham Road this fall. United Health Group will be consolidating within their current space at 300 Southborough Drive, therefore giving back around 10,000 SF pf space.
Looking ahead to 2019, Fairchild Semiconductor is currently in 55,000 SF at 82 Running Hill Road with a lease expiring in June of 2019 and will likely vacate their space. Overall, this accounts for around 300,000 SF that will likely be coming available in the Suburban Class A market by the end of 2019.