The commercial building at 1830 Lisbon St. in Lewiston, a 19,600-square-foot retail space, was leased in November 2022 with a triple net lease of $5.50 per square foot. Frank Carr, the senior vice president of Maine Realty Advisors, predicted Thursday that as more people move to Lewiston and Auburn, a growth in commercial real estate will follow. Daryn Slover/Sun Journal
PORTLAND — Lewiston and Auburn were the stars of Maine Real Estate and Development Association’s annual forecast conference Thursday at the Cross Insurance Arena in Portland.
More than 800 professionals attended the meeting billed as a “sneak peek into Maine’s real estate industry.” The “booming” growth in Lewiston and Auburn’s residential market, as MEREDA Executive Director Shelly Clark put it, was a major theme throughout the day.
“(There’s) a lot of opportunity and excitement about the Lewiston-Auburn area and that’s being reflected in the sales activity we’re seeing up there,” Brit Vitalius, the founder and designated broker of Portland-based Vitalius Real Estate Group, said in an interview Friday.
“That area has struggled for many years to enjoy the levels of pricing and prosperity and investment that has benefited other communities in southern Maine. And it seems like in the last few years, it’s started to turn the corner. And that’s being reflected in the prices and sales activity,” Vitalius, who specializes in selling multifamily properties in southern Maine, said.
Multifamily properties are basically any property with more than one individual family unit. These range from smaller properties with two to four units to larger commercial developments with five or more units.
Compared with the market for multifamily properties in Portland, South Portland, Westbrook and Biddeford and Saco, only the Twin Cities saw an increase in the total sales volume — the sum of all real estate transactions made in a year — in 2022 compared to 2021.
Last year, 193 multifamily units were sold in Lewiston and Auburn for a total sales volume of $59 million, a 31% increase over 2021, according to data provided by Vitalius.
The total number of multifamily properties sold in Lewiston and Auburn was also higher than any of the other markets in southern Maine, with the 139 properties sold in Portland coming in at a distant second.
“The high demand for housing everywhere has affected every market in Portland, and Lewiston and Auburn have a lot of housing so it’s a great place to look if you want to create more housing or improve the existing housing,” Vitalius said.
“Lewiston is getting the squeeze out of Portland,” Frank Carr, a broker and senior vice president of Maine Realty Advisors in Portland who works in office, retail and industrial real estate as well as residential.
Carr, Vitalius and other presenters said Portland’s rent control ordinance, which has largely been unpopular among landlords, and other policies have limited development and made the housing stock that is available more expensive and lower quality.
“It’s caused the landlords not to improve their product,” Carr said.
He said landlords do not have the capital or as much incentive to fix up apartments between tenants.
The 8,600-square-foot commercial building at 410 Center St. in Auburn sold for $3.43 million in May 2022. Frank Carr, senior vice president of Maine Realty Advisors, predicted Thursday that as more people move to Lewiston and Auburn, a growth in commercial real estate will follow. Daryn Slover/Sun Journal
Lewiston and Auburn, on the other hand, have benefited from “positive, proactive outreach” by the cities’ leaders to attract investors, Vitalius said.
“What’s happening in Lewiston and Auburn is product is being built and it’s of better quality, and it’s at a different price point. So that’s causing this increase in sales in both single-family homes as well as the multifamily,” Carr said.
While sales and leases of office and retail spaces decreased in 2022 and the industrial market in Lewiston and Auburn only saw a slight increase, Carr predicted that as more people move to the area, more companies will want to open office or retail spaces.
“Based on the echo effect, we will see increased transactions in the office, retail, industrial area just because those large corporate clients will see an employment base that they can draw from. And Lewiston and Auburn will become that desired place to relocate to.”
One of the big challenges the cities face moving forward is how to grow without becoming unaffordable or displacing current residents, Vitalius said.
“If they can balance it right and also be creating new housing and meeting the demand for the housing, it may fare better than communities like Portland, where they don’t want the rents to go up, but they keep restricting development,” he said.
“If Lewiston-Auburn are doing the opposite — embracing improvements but also creating more affordable housing at the same time — hopefully they can navigate this transition better than other communities.”
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