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May 10, 2022 at 6:00 am · · Comments Off on Bridges, Broadband, & Roads: MEREDA to Host Spring Conference on What the Infrastructure Bills Means for Maine

Bridges, Broadband, & Roads: MEREDA to Host Spring Conference on What the Infrastructure Bills Means for Maine

On May 24, 2022, the Maine Real Estate & Development Association (MEREDA) will host a dynamic and forward-looking conference on how the recently enacted Infrastructure Investment and Jobs Act will affect Maine’s economy. Facilitating a multifaceted discussion, MEREDA’s Spring Conference brings together a line-up of exciting speakers and panelists to explore the impact this influx of federal money will have on our state.

“There are so many industries that will be touched by the Infrastructure Bill. The scale of opportunity and the scale of effort that will be required is astonishing,” says MEREDA President Joshua Fifield. “From important policy discussions to a look at where the rubber will actually meet the road, our Spring Conference brings together industry leaders and offers an opportunity for us to do a deep dive into this important topic.”

MEREDA will host keynote speakers Commissioner Heather Johnson from the Department of Economic and Community Development and Dale Doughty, Director of Planning at the Maine Department of Transportation. The conference will also include an economic impact presentation from Dr. Charles Colgan, a Senior Research Advisor at Maine Center for Business and Economic Research and former State Economist of Maine.

Complementing these presentations, the stage will later turn to a moderated discussion with four in-state experts who will share their perspectives. Panelists will include Scott Jason of Cianbro Construction, Michael Stoddard of Efficiency Maine, Greg Payne from the Governor’s Office of Policy Innovation and the Future, and Kerem Durdag of GWI Broadband. The panel will be moderated by Brain Curley, Architect and Director of Design and Construction at MaineHealth.

MEREDA will also unveil its 2022 MEREDA Index, which is underwritten by Eaton Peabody and supported by Katahdin Trust Co., MaineHousing, and XPress Copy; as well as recognize its 2021 Notable Project recipients at the Spring Conference. The conference will be held in accordance with current CDC safety guidelines at The Holiday Inn By the Bay from 1pm to 5pm on Tuesday, May 24. A virtual attendance option is also available.

In-person broker, appraiser, and architect attendees are eligible for Continuing Education Credits.

This event is sponsored by NBT Bank, Cianbro, Treadwell Franklin Infrastructure, Efficiency Maine, Mainebiz, Maine Magazine, Premium Parking, Pierce Atwood, Sevee & Maher Engineers, GoNetSpeed, People’s United Bank, Tangram 3DS, Redstone, Perkins Thompson, and AAA Energy Service Co.. For more information, or to register for the conference please visit www.mereda.org.

May 3, 2022 at 6:00 am · · Comments Off on It’s a good time to review your IT security plan

It’s a good time to review your IT security plan

by Joshua Fifield, CPCU, AAI, Vice President, Senior Account Executive, Business Insurance Agent, Clark Insurance

We have been experiencing unpredicted cyber liability claims since the start of the pandemic, from ransomware to social engineering fraud to cloud jacking, etc. It’s a good time to review your IT security plan especially as a rental property owner and property manager. You don’t have to be a retailer processing thousands of electronic transactions per month to have a meaningful exposure to the theft of personal information. If you have names and social security numbers of current, former and  prospective tenants, then you are at risk, even if you don’t store them on a computer.  Physical theft of a laptop, hard drive, cell phone, tablet or even paper files can lead to a breach. The most common way a ransomware attack starts is opening an infected email. And storing your data on the cloud may not save you either as most contracts don’t provide you with any remedies should they get attacked or suffer a breach.

Once you have a ransomware attack or a breach of your personal identifiable information you need a forensic specialist to determine the extent of a breach and determine next steps, including notification to all those affected, public relations and how to get your information unencrypted. It also may be necessary to offer a year or more of credit monitoring to be sure that there is no attempted identity theft. In the end, the average cost of all this continues to grow; for example it used to cost approximately $200 to notify per affected party. Then there is the possibility of a lawsuit brought against you by the affected parties for damages associated with a breach. Loss of earnings, emotional distress and suffering are all possibilities and expensive.

You don’t want to have to figure this out on your own. You can transfer your risk to a Cyber Liability product with a suite of coverages and risk management services. Its starts with an application and the application’s questions will help you better understand your risk Unfortunately the bad guys are one step ahead of the best technology. Firewalls and anti-virus software are great but already since June, Cyber Liability carriers now require even stronger controls be in place, including MFA – Multi-factor authentication is required for any remote desktop log-in…

If you aren’t getting answers that make sense, we at Clark Insurance can help.

April 19, 2022 at 6:00 am · · Comments Off on Maine Contractor Licensing and Regulation Fails Again in the Maine Legislature

Maine Contractor Licensing and Regulation Fails Again in the Maine Legislature

By Michael R. Bosse, Shareholder, Bernstein Shur

If at first you don’t succeed, try and try again.

LD 1977, a proposed bill titled “Registration for General Contractors for Home Improvement and Construction” was reported out as “Ought Not To Pass” on March 7, 2022, by the legislative committee holding hearings on the proposed bill. In legislative parlance, that means that the bill has “died” in committee. This means that efforts to pass any kind of registration or licensing requirement for residential contractors will have to await a future legislative effort.

LD 1977 was reported by Senator Curry of Waldo and would have required annual registration by residential contractors in the state, whether operating as individuals or corporations. The bill also would have required residential contractors to report minimum basic information to consumers, including information about the company, its insurance, past bankruptcies, and prior complaints against the contractor. The proposed bill exempted subcontractors, as well as a host of other regulated professions such as architects, engineers, plumbers, and those working in the oil, propane, and natural gas market.

Despite wide reporting in the media of troubling situations involving residential contractors and homeowners, the bill faced steep opposition, which ultimately led to the negative committee vote. Those voicing opposition to the bill’s passing argued that either the proposed law would not stop residential contractor fraud, or that it would adversely affect the construction industry. The Mills Administration did not support the bill, arguing that the bill would create another hurdle for those attempting to become contractors. Others argued that it would increase the cost of construction work, or that it would increase the already high price of homes in Maine.

As a result, the law governing home contractors remains as-is for now. The Maine Home Construction Contracts Act, passed largely in 1987, governs any home construction contract over $3,000 and requires certain provisions to be present in any residential contract. A violation of the Act can result in both a civil penalty as well as a claim of unfair trade practice under Maine’s Unfair Trade Practices Act. Both statutes must be enforced by action of the homeowner in civil court. In a few high-profile matters, the Attorney General’s Office has brought action against contractors for a group of homeowners.

The existing framework continues to place a high premium on homeowners performing their own due diligence prior to working with a home contractor or giving a contractor a deposit for work. When things go badly, your best option remains to contact a lawyer and get apprised of your rights for your unique situation.

Original article published on March 29, 2022, https://www.bernsteinshur.com/what/publications/maine-contractor-licensing-and-regulation-fails-again-in-the-maine-legislature/ 

March 29, 2022 at 6:00 am · · Comments Off on Has COVID made a permanent shift to Maine’s real estate market?

Has COVID made a permanent shift to Maine’s real estate market?

By Dava Davin, Founder + CEO, Portside Real Estate Group

Maine’s residential real estate market (condos + single family homes) was a $8.7 billion market in 2021, a 22% increase over 2020. Units traded remained mostly the same, but the price increases were staggering. Will these prices stay at this level, will they continue to increase at this rate? If we look back at Maine’s history we see that the median home price was $100,000 in 1998, it took 19 years, until 2017, to hit $200,000. And then just five years later in 2021 the median price topped out at $299,000. So what once took 19 years to accomplish (home prices to rise $100,000), most recently took just five years! In the last 10 years home prices rose 76%, the previous decade there was still a solid increase but at 22% it paled in comparison to what we have seen in recent years. Real estate prices will always go up over time, however the most recent rate of acceleration will moderate.

Seasonality + Market Expansion
Before the pandemic we always saw a very seasonal Maine market peaking with the most units selling in August and the lowest amount of units selling in February. During the last two years we saw a longer selling season and the most units selling in October resulting in a two month extension of the peak selling season from June until October.

The median home price in Southern Maine (Cumberland + York County) in 2021 was $419,000 and in the other 14 counties it was only $235, 000. 35% of the units sold in Maine were in Cumberland + York County and that translated to 49% of the volume, basically half of the $8.7 billion is being transacted in Southern Maine

What we see across the board in Maine is over asking selling prices and very low days on market. This shows a strong market throughout the state and opportunities in areas outside of Southern Maine.

Sky High Prices
I mentioned above that the medium single family home price in Southern Maine is $419,000. What is a buyer getting for that median price? They are purchasing a 3 bedroom home with 1.5 baths, depending on the location, they will get more or less land and potentially a garage!

In the last year home prices rose 20% and the year before they rose at almost 14% statewide. As Southern Maine prices get out of reach for Mainers, folks will move to more rural areas which will help build communities and businesses, this could turn out to be a great side effect of the pandemic for Maine!

More Realtors
This hot market has driven more agents as well! There are A LOT more realtors!

The National Association of Realtors reported a record number of agents in 2021. 180,000 new agents entered the industry with virtually no increase in listings nationwide.

We have more real estate agents in Maine as well, but it has not affected our veteran agents’ careers. They are selling more than ever even with the enhanced competition. Since pre pandemic days, Maine has 14% more agents in the mix but 58% more agents are selling $4 million or more a year, 120% more agents selling $10 million or more and almost triple the amount of agents selling $20 million or more annually.

The market is tricky as each property is bound to have several bids, the seasoned and well trained agents are able to navigate that to ensure both buyers and sellers are being represented in the best way possible.

Looking Forward
2021 has been a wild ride for the real estate industry and these trends will no doubt carry over into 2022. As we continue into this broader, more expensive market, I am inspired by the hard work and dedication of Maine’s realtors, the Mainers that are committed to Maine and the fresh faces that are choosing Maine!

 

March 22, 2022 at 6:00 am · · Comments Off on With PFAS, shocking headlines are just the beginning 

With PFAS, shocking headlines are just the beginning 

By Keith Taylor, L.G., P.G., Technical Lead and Senior Environmental Geologist at St.Germain

Per- and polyfluoroalkyl substances (PFAS), widely known as “forever chemicals,” are threatening communities here in Maine and across the United States. We are going to bring you beyond the headlines to explain what they are, why they’re a big problem with a difficult solution, and where we’re headed next. Let’s start at the beginning.

What are PFAS and where are they found?
PFAS are a family of complex compounds primarily consisting of perfluorooctane sulfonate (PFOS) and perfluorooctanoic acid (PFOA).

PFAS can make materials stain-resistant, waterproof, and/or nonstick, and can be found in things like nonstick cookware (e.g., Teflon®), stain resistant sprays (e.g., Scotchgard®), water resistant apparel (e.g., Gore-Tex®), and many other common household items ranging from nail polish to microwave popcorn bags.

Foams made from PFAS are also very effective at fighting petroleum product-based fires, and have been used extensively by many fire departments, airports, and military bases.

Unfortunately, “forever chemicals” have the same lasting impact on the environment and the human body. Instead of breaking down, they actually bioaccumulate over time. While the potential health effects are not conclusive, we do know PFAS are very persistent in the environment and are often detected in soil, water, and in the human body.

When it comes to humans, EPA findings suggest that PFAS may:

Affect the developing fetus and child, including possible changes in growth, learning, and behavior

Decrease fertility and interfere with the body’s natural hormones

Increase cholesterol

Affect the immune system
Increase cancer risk

During the 1980s and 1990s, studies found PFAS in a large percentage of blood samples from non-occupationally exposed people around the world. By 2002, the primary manufacturers in the United States began to phase out their PFAS use, and the process was completed in 2015.

But, that’s not the end of this story.

In the news and here to stay
According to The National Law Review, “the PFAS litigation thus far has centered on lawsuits filed against PFAS manufacturers for environmental cleanup and remediation, with some lawsuits against these companies for personal injury claims.” With a quick online search, you can see what’s happening right now around the United States – with some contentious legal battles up ahead.

Here in Maine, we’ve had some disturbing recent news:

Chemicals are turning up in well water across the state at levels 300 to 400 times higher than the federal health advisory level. Source

In 2020, state regulators found PFAS levels more than 150 times higher than the state’s milk standard on a Fairfield dairy farm that had used contaminated sludge as fertilizer. Source

A Fairfield couple discovered that biosolids spread on the same nearby farm contaminated their (and their neighbors’) well. State well tests found 12,000 parts per trillion (ppt) of one known-problematic PFAS called perfluorooctanoic acid (PFOA) and 12,800 ppt of another, perfluorooctanesulfonic acid (PFOS). For context, the EPA health advisory level is 70 ppt and Maine’s newly-passed state limit is 20 ppt. Source

We may see even more headlines up ahead, since Governor Janet T. Mills just signed a law broadening the definition of allowable legal cases alleging damage or injury from PFAS. Now, they can be filed up to six years after the harm was or could reasonably have been discovered.

A complex problem with some common sources
PFAS are so widespread because they start out in lots of places. Here’s some typical sources where they are found:

Biosolids: As defined by the EPA: “Biosolids are a product of the wastewater treatment process. During wastewater treatment the liquids are separated from the solids. Those solids are then treated physically and chemically to produce a semisolid, nutrient-rich product known as biosolids. The terms ‘biosolids’ and ‘sewage sludge’ are often used interchangeably.” Since biosolids were largely considered beneficial to agricultural land and reclamation sites (i.e., mining sites), they have been used in many places, especially in central Maine with State approval. Unfortunately, many biosolids spread across the land are contaminated with PFAS.

Well water: In the Fairfield case, experts say chemicals in biosolids (legally used as farm fertilizer) leached into the groundwater for decades – causing the crisis in this community today.

Factories: Smokestacks can emit PFAS; and depending on wind patterns, the chemicals can travel to new communities and contaminate the ground.

Specific industries: Certain businesses (including car washes and ski shops) were higher PFAS users than others. When sites of these businesses – or even neighboring properties – go up for sale, they require close inspection, especially since banks typically require assessments of nearby areas. Additionally, all military bases have used PFAS for firefighting tests, especially Air Force bases concerned about planes catching on fire, and many local fire departments have done the same.

The solution is complicated
Identifying PFAS can be tricky, and their persistence can make site remediation difficult.

As we speak, some affected towns in New Hampshire are spending millions of dollars on new water systems; and the State of Maine is also stepping up. In July 2021, a state law requiring manufacturers to report their use of a class of toxic chemicals, and to phase them out by 2030, came into effect. Maine also has a new statute requiring land and groundwater tests where sludge has been spread.

St.Germain can help businesses and property owners tackle the first steps of site assessment: Site evaluation and water source evaluations. Our experts in contaminant geochemistry can keep you a step ahead of the headlines, with fluency not just in a few of the best-known PFAS, but in the 36+ that we know can impact environmental and human health. We understand how these contaminants behave, and we can help you plan next steps should any exist on your property.

Original article posted on February 17, 2022 can be found here:  https://stgermain.com/pfas/?utm_medium=email&_hsmi=204264306&_hsenc=p2ANqtz–qtG1JUgZc941ZhvBgyGKLMoptSURHhCFoIriL2dHjDuhqioDpQp_wskgGxciCNQuWCTe_1LyDi8k6KeqOwg_WGBGPHA&utm_content=204264306&utm_source=hs_email

March 15, 2022 at 6:00 am · · Comments Off on Midcoast Maine is Having a Moment

Midcoast Maine is Having a Moment

By Dave Holman, MBA, Associate Broker – ReMax Riverside

On January 20th Dave presented the “Midcoast Maine Market Forecast” at the Maine Real Estate & Development Association’s (MEREDA’s) 2022 Annual Forecast Conference. Below is a recap from his presentation.

Midcoast Maine is having a moment. The triangle of Brunswick, Topsham and Bath experienced steady growth from 2014-2019, leaving the housing market hot, rents rising, new companies opening and jobs getting posted and filled by locals and non-locals alike. Then the pandemic hit and we collectively inhaled as we expected the sky to fall in both the economic and health realms. After much pain and even deaths on the health front, the economy has paradoxically boomed. 2020 and particularly 2021 witnessed an almost exponential expansion of job growth, construction and activity that the towns are racing to keep up with. In short, everybody wants to work and live here but there’s not enough room.

Let’s start with an amazing turnaround. The suburbanization of the 1950s-1980s gave way to urban renewal from the 1990s-2019. Portland went from the gritty port town of our youth to the foodie and condo mecca of today. The pandemic not only spurred an exodus from the cramped close quarters where outbreaks spread fast but also ignited a remote-work explosion where people kept their urban jobs but worked from pristine environments place like Merrymeeting Bay. Last year, New York State saw negative 1.6% population growth and Massachusetts saw negative .5% growth. People skedaddled the big cities. It will come as no surprise to you that Maine saw its highest growth in recent decades, up .7% in 2021. The urbanization trend in New England and nationally has turned on a dime, people are fleeing to so called “zoom towns” with high quality of life and this trend shows no signs of stopping in 2022.

We’ve all heard the bittersweet story of Midcoast residential real estate prices jumping up 21% last year, causing many locals to throw their hands up and many out of staters to plunk down cash offers. What you may have missed is that multifamily apartment prices are up an astonishing 48% per unit and commercial/industrial is up an eye-watering 64% year over year. This is not just cannabis growers and greedy landlord folks, this is genuine population pressure and job growth being poured into a small market with minimal construction over the past decade. Rents for a one-bedroom apartment that averaged $838 in 2018 stood at $1348 at the end of 2021, representing 62% growth in 3 years. The midcoast is experiencing an affordability crisis because new units are extremely expensive to build and slow to bring online.

But there’s good news too. Local governments are guiding growth into designated areas and establishing design and sustainability guidelines for new developments. The hot market is bringing exciting new opportunities to town like the new Martin’s Point facility in Brunswick, the new hockey rink and Market Basket in Topsham and a new River Walk in Bath. Bowdoin College is building Maine’s first ever mass timber (think modern post and beam made with laminated trusses) buildings that will reduce their carbon footprint by 75%. Entrepreneurs are bringing new businesses to town like Maiz, a Colombian street food restaurant and Animal House, an all-natural pet supply store. As this slice of the midcoast develops and expands, locals are focusing on quality, not quantity; preserving historic downtowns while renewing badly needed infrastructure like bridges and looking to see if the future stays hot or calms down.

March 1, 2022 at 6:00 am · · Comments Off on Greater Portland Office Market Outlook – 2022

Greater Portland Office Market Outlook – 2022

By Nate Stevens, Partner / Broker, The Boulos Company

On January 20th Nate presented the “Greater Portland Office Market Forecast” at the Maine Real Estate & Development Association’s (MEREDA’s) 2022 Annual Forecast Conference. Below is a recap from The Boulos Company’s Office Market Survey.

The Greater Portland Office Market has remained resilient over the past couple years, as evidenced in our survey last year. We had all hoped for a return to some normalcy in the office market in 2021, but as the pandemic continues, so does the uncertainty of its impact on office space. Here at The Boulos Company, we didn’t know what to expect from our annual Office Market Survey this year. How were office occupiers, large and small, going to use their offices moving forward? Did they still even need them at all? Through our COVID Office Impact Survey, we found that, yes, offices are still needed, and the data pulled in our 2022 Greater Portland Office Market Survey supports that. The question went from “Do we need our office?” to “How do we use our office?” Despite a year plagued by uncertainty and change, the market proved surprisingly strong and, while demand has stayed moderately low, vacancy rates were kept in check this past year.

As of December 1, 2021, the direct vacancy rate fell to 6.73% across the entire Greater Portland market. This is down slightly from 6.97% in 2020 and shows that, despite the ongoing pandemic and reevaluation of the office space, there was not much movement in the direct rate – a surprise to many. However, what was anticipated was a continued increase in sublease space being offered. This rate increased from 1.73% in 2020 to 2.70% in 2021 with 125,000± SF of sublease space added over the previous year. This increase in the sublease rate pushed the total vacancy rate to 9.42% in 2021, an increase from a total rate of 8.70% in 2020.

Downtown Portland

After a spike in the overall downtown vacancy rate in 2020, rates rebounded in 2021. The direct vacancy rate for both Class A and Class B markets fell to a collective 8.61%. This is still the highest rate since 2013, but nowhere near the height of the downtown vacancy rate of 13.96% in 2011. The sublease rate remained relatively unchanged from the year prior. The downtown Class A market, which had a direct vacancy rate of just 0.61% only a couple years ago, fell from 6.60% in 2020 to 5.02% in 2021. This is largely due to one significant transaction, as the University of Maine leased 61,000± SF of vacant office space for The School of Law and Maine Graduate & Professional Center. This market is also poised for continued growth with the new Covetrus and Sun Life buildings slated to open in 2022.

Along with the Class A market, the downtown Class B vacancy rate also dropped, falling from 13.32% in 2020 to 12.29% in 2021. No large leases were signed in this market to push the rate lower, however, the drop can be attributed to numerous smaller transactions and a trend in Class B buildings being converted from vacant office space to residential and hospitality uses. Over the last half decade, close to 200,000 square feet of Class B office space, much of it vacant, has been removed from our survey.

Suburban Office

While the overall and downtown markets experienced a drop in the direct vacancy rates, suburban Class A and Class B rates increased slightly from 6.29% up to 6.67%. This remains a healthy rate compared to years past, lower than any year from 2009 until 2014 during the Great Recession. The suburban markets consist of South Portland, Scarborough, Maine Mall Area, Westbrook, and Falmouth/Cumberland/Yarmouth. There was an increase in vacancy at some level across all submarkets except for Class A properties in the Maine Mall area and Class B properties in the Falmouth/Cumberland/Yarmouth market.

Despite the overall increase in suburban rates, Class A properties had a decrease in the vacancies from 7.04% down to 6.57%. This was largely driven by significant transactions in the Maine Mall area, especially the leasing of 34,000± SF at 65 Gannett Drive and 31,000± SF at 225 Gorham Road. However, the aforementioned increase in sublease space on the market is almost entirely concentrated in the Maine Mall area, with considerable vacancies on the horizon in this market over the next three years. This may have a sizable effect on vacancy rates, given the current demand for office space in these markets.

The suburban Class B vacancy rate saw one of the largest changes in any market. The vacancy rate rose to 6.85%, up from 4.84% in 2020, and serving as the driver behind the increase of suburban rates overall. Once again, the influence behind this change was concentrated in the Maine Mall area, as the Class B rate in this submarket increased from just 3.86% to 11.95% over the past 12 months. Most other Class B submarkets experienced an increase in vacancy rates, although most were relatively minor.

Medical Office

Despite the pandemic, medical office space rates remain historically low, although there was a slight increase in this submarket for the first time in several years. This increase was from just 0.52% in 2020 to 1.11% in 2021, still an extremely low rate in a market that experiences very little turnover. Added to the survey this year was 92 Campus Drive, a 108,000± SF medical building on the MaineHealth campus in Scarborough. The 62,000± SF VA outpatient clinic on Commercial Street will be occupied in the early part of 2022 and will be included in next year’s survey.

2022 Office Market Forecast

Last year’s forecast was not easy, and this past year did not make the future much clearer. We were right in assuming that there would not be a snap back to pre-pandemic rates and that the overall market may remain relatively unchanged. For 2022, we may experience much of the same, as the office market is still in flux. The pandemic may eventually have a more significant impact on the market, but we did not see it this year, and there are no obvious signs to a mass exodus of office space. While the amount of sublease space on the market is concerning, it is unlikely that this will have a major effect over the next 12 months. Additionally, there are several transactions underway that will only improve the overall rates. A return of demand for office space is important to market absorption, and the recovery has proved slower than initially anticipated. However, over the past two years, we have all learned to adapt – the office market is no different.

The full report can be accessed here: https://boulos.com/office-market-outlook/

February 22, 2022 at 6:00 am · · Comments Off on Greater Portland Industrial Real Estate Market Update – 2022

Greater Portland Industrial Real Estate Market Update – 2022

By Justin Lamontagne, CCIM, SIOR, Partner | Designated Broker, The Dunham Group

On January 20th Justin presented the “Greater Portland Industrial Market Forecast” at the Maine Real Estate & Development Association’s (MEREDA’s) 2022 Annual Forecast Conference. Below is a modified version of The Dunham Group’s Market Survey.

After the roller coaster that was 2020 (remember the Great Pause of March/April 2020?!), we settled into a more traditional industrial sector experience in 2021. That is to say, it was nuts. Our decade run of increasing demand and decreasing supply continued and we see no signs of material change in the coming year.

All of our economic indicators including lease rates, sale pricing, cap rates, and overall inventory counts reflect as competitive and challenging a market as we’ve ever experienced. Overall vacancy rates fell sharply from last year’s 2.44% to today’s stifling 1.69%, and that is with a nearly 500,000 SF increase in supply! Even with two additional speculative construction projects in the pipeline, my sense is we’ll be working in a sub-2% vacancy environment for most of 2021. That, of course, is an inhibiting number for tenants and buyers, particularly small-medium sized companies in the 5-10k SF range.

The aforementioned increase in supply is largely due to the unprecedented success of the Innovation District at the Downs. About a dozen buildings were added, mostly by end-users. But a handful were speculative leasing projects that were fully rented by the end of this year. The land cost a premium as compared to raw, undeveloped sites ($300k/acre vs. $100k+-). But buyers had a much simpler and clearer path to getting shovels in the ground. It’s a model that is sure to be replicated in other parts of Southern Maine.

Of course, not every business can build new. The vast majority of our transactions are for existing sites and, most challenging, several were lease renewals. The last couple years has reinforced the importance of having strong lease renewal language in how to define “market rates”. It’s a delicate balance. We navigated several deals where Landlord’s want all the money but need to consider the benefits of keeping a good tenant versus testing the market for a new one. And, importantly, we’re starting to get to a point where businesses simply can’t afford what the market may bare. So difficult decisions are being made across the board and there are certainly winners and losers.

I continue to be amazed at the fiercely competitive and ever rising sales market. Virtually every industrial sale in 2021 set a record for its area. As with lease pricing, brokers are setting the market on each sale. We try to set value based on data and buyer appetite (not to mention appraisers) for increasing costs. But, truthfully, there is a sense of throwing darts when it comes to setting asking prices right now. Overall, we are now averaging over $85/sf, but that’s statistically deflated due to some larger SF sales. Anything under 20,000 SF is now comfortably over $100/sf. And premium sales are much higher, particularly those buildings that are cannabis-appropriate. That industry seems to have no budget. These are staggering numbers, nearing full replacement costs.

An interesting byproduct of all of this activity is the impact on the industrial capital markets. As you’d expect the product has never been hotter. We are now regularly seeing 7% cap rates for well-located Class-A & B facilities, and some cases even lower. And investor-appetite for risk continues to increase with shorter lease commitments, shakier tenants and expanding geographics. These deals are often precipitated by 1031-Exchange and cash buyers driving competition. Banks and appraisers are starting to catch up and underwriting problems have seemed to have eased. I don’t think there’s any doubt that financial institutions feel as comfortable with industrial real estate as they do with housing and multi-families. With larger, institutional competition discovering our market, many smaller, local investors are on the sidelines. But opportunities remain for those who are well plugged into the market. A number of the more successful investment sales of the year were off-market, local deals and that trend is likely to continue into 2022.

Perhaps the only thing I can see impeding the industrial sectors continued growth: the economy. Industrial businesses are not immune to things like inflation, or shrinking labor pools, or supply chain issues or any of the other scary things beyond our control. That said, even with the specter of a worsening economy, I think it unlikely our local industrial market will take much of a hit. The local conditions and indicators are simply too strong for any major negative swings into 2022.

The Dunham Group’s annual study and inventory of the industrial real estate market is now available!

Download your copy here.

February 8, 2022 at 6:00 am · · Comments Off on Stormwater Compliance: A Guide for Maine Businesses

Stormwater Compliance: A Guide for Maine Businesses

Businesses play a large role in protecting Maine’s environment, including our land and wildlife, and stormwater compliance is a big part of that. In this article, we’ll break down the complexities of proper compliance and explain how businesses can simplify the process – a win for the business and for Maine. Let’s get started.

What is stormwater?

Stormwater is water (rain or snow melt) that runs across and down from impervious surfaces, such as pavement and rooftops. At sites where industrial activities involving contaminants take place outdoors, improper stormwater discharge can cause that pollution to spread off site.

Who needs a stormwater permit, and what does it involve?

To regulate stormwater discharge, the Maine Department of Environmental Protection (DEP) and the Federal EPA require sites associated with certain industrial activities to obtain coverage under Multi-Sector General Permits (MSGPs), which are designed to ensure the reduction or elimination of pollutants in these specific stormwater discharges.

The MSGP requirement applies to 29 industrial sectors using applicable Standard Industrial Classification (SIC) Codes, accessible through the U.S. Department of Labor here. Solid waste transfer stations, for example, often need to have this type of permit if they move waste outdoors where it might encounter stormwater.

If industrial activities are not exposed to rain or snow/ice melt (for example, if they take place under a protected shelter), a facility may potentially qualify for exclusion from the MSGP, though they still must comply with requirements defined in the DEP No Exposure Certification (NEC) form and undergo regular DEP inspection.

If you’re unsure whether your business or job site needs a stormwater permit, start with the following three questions:

1. What do you do outside?
If you conduct outside industrial activities that come into contact with rainwater, you will most likely need a permit.

2. Where does your water go?
It’s important to know where water is flowing after a big rain/snow/ice melt event since it will impact your requirements.

3. Do you have any rivers or streams nearby?
Maine has so many rivers, streams, and wetlands that the chances of stormwater discharge reaching a waterbody (and all the aquatic wildlife and ecosystems within it) are usually strong.

If your site does fall under the MSGP, you’ll need to understand all the specific requirements of your industrial activity, secure the permit, and comply with its many terms, including:

Development of a Stormwater Pollution Prevention Plan (SWPPP)
The backbone of stormwater compliance is the development of, and adherence to, a stormwater pollution prevention plan.

This process identifies every possible source of stormwater pollutants/contamination on site. Some common hidden sources include:

• Bits of trash or debris from site activities
• Road dirt from big trucks moving in and out of the site
• Oil dripping from trucks or outdoor fueling stations

Not only does your customized SWPPP help prevent stormwater pollution, it also dually protects your business and our state.

Detailed monitoring and testing (when the actual minute counts)

Many states just follow the EPA rules, but Maine has its own state permit and corresponding requirements that differentiate it from others (for example, in Maine you must collect stormwater samples during normal operating hours, while other states do not have this requirement, which means samples may need to be collected in the middle of the night).

Your team must handle ongoing compliance tasks such as quarterly monitoring. While some parts can be scheduled (checking potential pollutant sources identified in the SWPPP to ensure they’re being well-maintained), Mother Nature is more unpredictable.

Following storm criteria, if 72 hours of dry weather are followed by more than 0.1 inches of rain within a 24-hour period, you need a collect this water sample once per quarter – ideally within the first hour of discharge (not when it starts raining, but rather when the water starts flowing off site), and no more than two hours and 15 minutes later. Not only is this a very tight window of time, but the ideal time to collect a sample is also very dependent on the site itself, with water flowing more quickly on some sites than others.

The normal rhythm of Maine’s four seasons also impacts quarterly testing (Q1 is often too frozen for a snow melt sample, spring and fall tend to be rainy, and summer can be very dry) – but it’s critical to meet State and EPA sampling requirements in all such conditions.

The photo below shows stormwater samples collected in mid-August 2021 after a rain event. These samples are in Imhoff cones, where experts evaluate the water for any evidence of pollution such as color, clarity, suspended/settled solids, odor, foam, oil sheen, etc.

Protecting your business and our environment

A stormwater discharge plan is critical. It keeps you compliant, prevents environmental damage, and keeps your business operating at its fullest potential, now and in the future.

This article was written by the team at St.Germain, a local leading provider of stormwater services and stormwater engineering management solutions. Visit https://stgermain.com/ to learn more.

February 1, 2022 at 6:00 am · · Comments Off on MEREDA Recognizes Four Outstanding Individuals for Their Contributions to Real Estate Development and Policy in Maine

MEREDA Recognizes Four Outstanding Individuals for Their Contributions to Real Estate Development and Policy in Maine

On January 20, 2022, the Maine Real Estate and Development Association (MEREDA) recognized four outstanding individuals for their significant and lasting contributions to real estate development in the State of Maine. The awards were presented in person at this year’s Forecast Conference at the Cross Insurance Arena, which also featured an option to watch the presentations virtually as well.

Click here to watch the awards ceremony.

Paul Peck has been selected for this year’s Robert B. Patterson Jr. Founder’s Award, for his extraordinary commitment and dedication to MEREDA over the years. A problem solver and a leader, Paul has provided many valuable contributions to MEREDA.

An active and enthusiastic member of MEREDA’s Board of Directors since 2010, Paul served as volunteer President from 2016 – 2018, and before that co-chaired MEREDA’s Conference Committee. His contributions were recognized previously in 2012 when he received MEREDA’s President’s Award. He currently serves on MEREDA’s Executive and Public Policy Committees, where MEREDA continues to benefit from Paul’s legal expertise and career experiences

Paul is the founder of LWS Development LLC, a Maine real estate development company that has developed housing, assisted living, and resort communities.  Since 1992, Paul has also practiced law at the firm of Drummond & Drummond, with a concentration on real estate law, business law, and creditors’ rights.

The President’s Award is given by MEREDA’s current volunteer President in recognition of someone who has made significant contributions on MEREDA’s behalf. This year’s President’s Award goes to a remarkable individual, Andrea Cianchette Maker, for her lasting contributions to MEREDA in her role as Public Policy Counsel.

For the past ten years, Andrea has guided the work of MEREDA’s Public Policy and Local Issues Committee, serving as Public Policy Counsel and a key advisor to the Executive Committee and the Board. In that time, Andrea has helped elevate MEREDA’s public profile as the state’s premier trade association for commercial real estate and development. From her work in Augusta to her annual presentations at the Forecast Conference and everything in between, Andrea takes a thoughtful, collaborative, and effective approach to advocacy work and public policy engagement.

A true servant leader, Andrea has helped build up and provide guidance to MEREDA’s advocacy and engagement approach, helping us ensure a more fair, practical, and predictable landscape for commercial development in Maine. Andrea has been steadfastly vigilant for MEREDA members’ interests, and she has helped ensure that MEREDA’s voice is consistently heard during debates in Augusta and at the local level.  In particular, her work assisting the Public Policy Committee to determine its position or level of engagement on specific bills has been invaluable to maximizing MEREDA’s resources and impact.

Andrea announced her retirement from Pierce Atwood in the fall of 2020. Her leadership and dedication to MEREDA will continue to positively affect our organization long after she leaves. We are grateful for her time, thoughtfulness, passion, and commitment to furthering MEREDA’s interests and helping drive economic development in Maine.

The MEREDA Public Policy Award is presented each year to an individual whose efforts have made a significant impact on public policy changes that benefit responsible real estate development and ownership in Maine. This year we recognize the contributions of Representative Ryan Fecteau, Speaker of the Maine House of Representatives.

In his role as Speaker, Representative Fecteau has been a model leader for other legislators, working across the aisle and with his own party to seek compromise, consensus, and practical solutions to the real problems faced by Maine people. Despite being the youngest Speaker of the House in the United States, Representative Fecteau has made considerable strides toward improving the lives of Mainers. Of particular importance to MEREDA has been the Speaker’s steadfast efforts to increase affordable housing and improve the economic development landscape in Maine.

In 2020, the Speaker worked to successfully enact a state low income housing tax credit – a longtime goal of affordable housing advocates. Modeled off the federal low income housing tax credit, the state credit has already been impactful to the development and construction of dozens of affordable housing units. Speaker Fecteau’s efforts on the credit were critical to its passage.  Further demonstrating his understanding of the housing and development landscape, Speaker Fecteau worked this past session to establish a Commission to Increase Housing Opportunities in Maine by Studying Zoning and Land Use Restrictions. That Commission’s final report contains several recommendations that we hope will be considered by the Second Regular Session of the 130th Legislature. We applaud Speaker Fecteau for taking a critical look at how to address Maine’s affordable housing shortage.

The Volunteer of the Year Award is awarded to those who generously share their time, talents, and energy with MEREDA. This year we honor the contributions of Craig Young, CCIM.

Craig joined the MEREDA Board in 2015 and serves on MEREDA’s Executive Committee as Vice President, and as co-chair of MEREDA’s Conference Committee.  With his can-do attitude, Craig exemplifies a leadership role that is particularly welcomed in a volunteer organization such as MEREDA, and was especially appreciated while we navigated the pandemic together. From emceeing the January 2021 Forecast and Spring Conferences to moderating several of our Morning Menu breakfast events, we are truly grateful for the expertise and time he has shared with our organization this past year. We couldn’t have done the 2021 events without him!

Craig is a Partner and Senior Broker at The Boulos Company, a commercial real estate firm that blends Maine and New Hampshire market knowledge with a global network and is dedicated to serving owners, investors, and tenants.

MEREDA congratulates these four exceptional members, and thanks every volunteer whose contributions of time and talent make the association’s continued success possible.