Harnden Commercial Brokers Year End Newsletter 2016
Harnden Commercial Brokers
Year End Newsletter 2016
Harnden Commercial Brokers is pleased to release our annual Greater Portland Office Market Survey. We will highlight the year in review and include guiding commentary on the Greater Portland Maine office market as well as notable sales transactions, and a look at the year ahead. The Greater Portland Office Market continues to be steadily active through the end of 2016. Rents are ticking up and will probably continue that way, while vacancy is down slightly, but overall steady. Downtown The Downtown market is as hot as ever. Overall vacancy dropped by almost 2.35 points to 7.56%, while sublease vacancy increased only slightly to 26,903 square feet even though Dechra Pharmaceuticals (Formerly Putney Vet) gave up a floor at One Monument Square. Absorption ended the year at 108,920 SF. Landlords have pushed rents up by 1.5% overall in 2016 on a weighted average, modified gross basis. • FC Beacon Group leased 17,581 SF at 280 Fore Street, a space that was vacated by Industrium who then relocated to 7,257 SF at One Canal Plaza. • Ameriprise, Prudential and Wells Fargo all renewed at Two Portland Square 10,949 SF, 51,831 SF, and 12,899 SF, respectively. • Eaton Peabody leased 14,097 SF at 100 Middle Street Suburban The Suburban market also saw decreasing overall vacancy during 2016, down just slightly to 7.56%. Absorption was in the red at 6,468 SF, and rents surged up 3.5%, again on a weighted average, modified gross basis. One Riverfront Plaza remains vacant at year end with whispers of potential deals which would drastically change the Suburban submarket vacancy. This building’s current vacancy accounts for 35% of the current available space in the overall Suburban market. If fully leased, Suburban vacancy would tighten to 5.0% overall. • WEX leased 42,000 SF at 95-97 Darling Avenue and Sebago Technics leased 18,435 SF at 75 John Roberts Road in the first half of the year. • Traveler’s Insurance Company, VHB and Sirona Health (Citra Solutions) all leased space at 500 SouthBorough Drive, SouthBorough Office Park this year. (4,827, 2,056, and 2,865 SF respectively) • Residential Mortgage Services leased 13,118 SF at 179 John Roberts Road and 8,114 SF at 75 John Roberts Road.
Year End Harnden Commercial Brokers Newsletter 2016
Sales The Capital markets slowed in 2016 with most softness on big deals when compared year over year. Rightfully so, as 2015 saw some of the biggest deals in Portland’s history with the sales of 100 Middle Street and One and Two Portland Square. Regardless there were still some notable sales this year, in the downtown market they include: • 88.5-90 Exchange Street sold for $1.675 million in January • 482 Congress sold for $5.4 million in December • 15 Lowell Street sold to Maine Eye SPE, LLC for $6.55 million in October. JB Brown was again an active local buyer and purchased both 102 Hutchins Drive, Portland from Unum for $4 million and 65 Gannett Drive, South Portland from First State Investors for $1.3 million, both in May.
482 Congress Street, Portland
102 Hutchins Dr., Portland
500 Southborough Dr. S. Portland
Looking Forward Interest rates are going up! They were raised after the December meeting of the Chairs of the Fed, and are expected to rise again before the end of 2016. • Sales Transactions will continue to slow this year. With rising interest rates we expect to see sales slowdown when compared with 2015 and early 2016. • Large “For Lease” floorplates options remain scarce downtown, but the suburbs offer multiple 10,000+ SF spaces for tenants of that size. • Large Tenants (45,000 SF +) are expected to sign leases this year, not inclusive of shadow space, and ultimately resulting in new construction, specifically in the downtown market. We are aware of at least 6 of these size tenants currently searching for space.
HARNDEN COMMERCIAL BROKERS
Jim Harnden President 207-650-3677 [email protected]
Sam LeGeyt Associate 860-866-8345 [email protected]
106 Lafayette Street Yarmouth, ME | 207-773-8300 | www.harndencommercialbrokers.com
Year End Newsletter 2016
Harnden Commercial Brokers is pleased to release our annual Greater Portland Office Market Survey. We will highlight the year in review and include guiding commentary on the Greater Portland Maine office market as well as notable sales transactions, and a look at the year ahead. The Greater Portland Office Market continues to be steadily active through the end of 2016. Rents are ticking up and will probably continue that way, while vacancy is down slightly, but overall steady. Downtown The Downtown market is as hot as ever. Overall vacancy dropped by almost 2.35 points to 7.56%, while sublease vacancy increased only slightly to 26,903 square feet even though Dechra Pharmaceuticals (Formerly Putney Vet) gave up a floor at One Monument Square. Absorption ended the year at 108,920 SF. Landlords have pushed rents up by 1.5% overall in 2016 on a weighted average, modified gross basis. • FC Beacon Group leased 17,581 SF at 280 Fore Street, a space that was vacated by Industrium who then relocated to 7,257 SF at One Canal Plaza. • Ameriprise, Prudential and Wells Fargo all renewed at Two Portland Square 10,949 SF, 51,831 SF, and 12,899 SF, respectively. • Eaton Peabody leased 14,097 SF at 100 Middle Street Suburban The Suburban market also saw decreasing overall vacancy during 2016, down just slightly to 7.56%. Absorption was in the red at 6,468 SF, and rents surged up 3.5%, again on a weighted average, modified gross basis. One Riverfront Plaza remains vacant at year end with whispers of potential deals which would drastically change the Suburban submarket vacancy. This building’s current vacancy accounts for 35% of the current available space in the overall Suburban market. If fully leased, Suburban vacancy would tighten to 5.0% overall. • WEX leased 42,000 SF at 95-97 Darling Avenue and Sebago Technics leased 18,435 SF at 75 John Roberts Road in the first half of the year. • Traveler’s Insurance Company, VHB and Sirona Health (Citra Solutions) all leased space at 500 SouthBorough Drive, SouthBorough Office Park this year. (4,827, 2,056, and 2,865 SF respectively) • Residential Mortgage Services leased 13,118 SF at 179 John Roberts Road and 8,114 SF at 75 John Roberts Road.
Year End Harnden Commercial Brokers Newsletter 2016
Sales The Capital markets slowed in 2016 with most softness on big deals when compared year over year. Rightfully so, as 2015 saw some of the biggest deals in Portland’s history with the sales of 100 Middle Street and One and Two Portland Square. Regardless there were still some notable sales this year, in the downtown market they include: • 88.5-90 Exchange Street sold for $1.675 million in January • 482 Congress sold for $5.4 million in December • 15 Lowell Street sold to Maine Eye SPE, LLC for $6.55 million in October. JB Brown was again an active local buyer and purchased both 102 Hutchins Drive, Portland from Unum for $4 million and 65 Gannett Drive, South Portland from First State Investors for $1.3 million, both in May.
482 Congress Street, Portland
102 Hutchins Dr., Portland
500 Southborough Dr. S. Portland
Looking Forward Interest rates are going up! They were raised after the December meeting of the Chairs of the Fed, and are expected to rise again before the end of 2016. • Sales Transactions will continue to slow this year. With rising interest rates we expect to see sales slowdown when compared with 2015 and early 2016. • Large “For Lease” floorplates options remain scarce downtown, but the suburbs offer multiple 10,000+ SF spaces for tenants of that size. • Large Tenants (45,000 SF +) are expected to sign leases this year, not inclusive of shadow space, and ultimately resulting in new construction, specifically in the downtown market. We are aware of at least 6 of these size tenants currently searching for space.
HARNDEN COMMERCIAL BROKERS
Jim Harnden President 207-650-3677 [email protected]
Sam LeGeyt Associate 860-866-8345 [email protected]
106 Lafayette Street Yarmouth, ME | 207-773-8300 | www.harndencommercialbrokers.com
