Bangor is poised for a rebirth of business development, with the emptiness price for present buildings under 1 p.c as a result of demand for warehousing is rising alongside adult-use marijuana cultivation area.
The vital want for industrial and versatile area within the Bangor space is driving firms to construct new area and growing gross sales of vacant tons for the primary time in a very long time, Tanya Emery, Bangor’s director of neighborhood and financial improvement, advised an actual property convention on Thursday. Many present areas date to the Nineteen Seventies.
“Zoning is being expanded in purchasing areas for mild industrial use,” she stated. “However there are restricted alternatives for industrial area with out new development.”
It’s a part of a development that reached Bangor later than different areas of Maine. Higher Portland, Brunswick and Topsham and the Lewiston-Auburn areas are additionally seeing new development and escalating lease and buy costs for industrial area. That section of the true property market has not been affected by the pandemic, with hashish operations and demand for warehouse storage rising as two huge components consuming up area.
“There’s seemingly no quantity that hashish firms gained’t pay to get actual property,” Justin Lamontagne, a dealer at The Dunham Group, stated.
Sibley Transportation Inc. of Bangor is trying so as to add one other warehouse to the 4 encompassing 250,000 sq. ft that it already owns or leases within the metropolis, together with the Galt Block Warehouse Co. constructing on Miller Avenue, which it bought final yr. The corporate shops quite a lot of items, together with paper for mills.
If an present warehouse grew to become accessible, it probably wouldn’t match Sibley’s storage wants as a result of many industrial properties are older and the ceilings are too low for the products it shops, stated President Marcus Sibley, who’s now contemplating constructing from scratch.
“Marijuana producers have taken up each accessible sq. foot of area in larger Bangor,” stated Sibley, who’s the fourth era operating the trucking and warehouse firm.
However marijuana firms can function in locations with decrease ceilings, stated David Hughes, an industrial actual property dealer with Epstein Business Actual Property in Bangor.
He didn’t have estimates for the full quantity of area held by marijuana firms within the Bangor space, however state license data record a number of firms with cultivation services on the outskirts of the town on Hildreth Avenue close to Hermon and Bomarc Highway near Glenburn.
Elevated warehouse area demand in Bangor began round 2017, with St. Croix Tissue in Baileyville utilizing tons of of hundreds of sq. ft and the latest demand by marijuana firms, Hughes stated. There is also extra demand to retailer supplies for infrastructure tasks and photo voltaic farms.
The economic emptiness price in Bangor, Brewer, Hampden and Hermon fell by half from 10 p.c in 2014 to five p.c in 2017, then to lower than 2 p.c by 2020 and fewer than 1 p.c now.
Whereas buyers are constructing industrial area in different markets to lease, they would wish to get $11 to $13 per sq. foot from lessees in Bangor to make their funding repay. That’s taking place in Portland and Lewiston-Auburn, however it’s not happening in Bangor but, he stated.
However homeowners who construct to make use of the construction are taking up new development. One instance is HVAC wholesaler Johnstone Provide, which is constructing a 30,000-square-foot warehouse within the Hampden Enterprise and Commerce Park.
A giant space of want is for smaller industrial area of 5,000 sq. ft or much less. Hughes stated that no less than a dozen companies that needed to maneuver to the Bangor space contacted him through the pandemic, however he had no area to indicate them.
The scenario will not be significantly better for bigger areas, inflicting him to look at fastidiously when an occupant is on the finish of their lease.
“I really feel like I’m enjoying musical chairs,” Hughes stated. “I’m filling area earlier than it’s vacant.”