The number of office leases completed in Portland and the greater suburbs in the third quarter of 2017 and 2018, compared to the third quarter of 2016 has decreased, however the average square footage leased per deal has increased. From Q3 2016 the average deal was 1,948 SF, Q3 2017 it increased to 4,110 SF and in Q3 2018 it was 3,477 SF (see data below). When looking at this data for both deals less than 10,000 SF and larger than 10,000 SF – the data showed the same trend of fewer deals but larger leases in the past 2 years. In the third quarter of 2016 there were zero deals above 10,000 SF and therefore all of the 72 deals were less than 10,000 SF. In 2017 there were far fewer deals less than 10,000 SF; 41 total deals averaging 2,297 SF and in 2018 there were 54 total deals below 10,000 SF averaging 2,385 SF. In 2017 and 2018 there were 6 total deals above 10,000 SF compared to zero deals greater than 10,000 SF in 2016.
So what does this trend mean for the Portland & Greater Portland real estate market? The office deals over the past two years have increased in square footage, which represents a larger overall trend in company growth for the area. With a growth in population to the state of Maine from 2016 – 2017 of 5,675 people (a .43% increase) and of that around 1,600 people in Cumberland County – this could be a driving factor for the office growth we have seen as more people and businesses are moving into the state. Based on this data and the all-time low unemployment rate for Portland, we anticipate this trend of larger office deals to continue next year.
- In Q3 2016 the total SF leased was 140,236 SF with a total of 72 deals, averaging 1,948 SF per deal.
- In Q3 2017 the total SF leased was 176,737 SF with a total of 43 deals, averaging 4,110 SF per deal.
- In Q3 2018 the total SF leased was 201,690 SF with a total of 58 deals, averaging 3,477 SF per deal.