Maine Capital Markets Update – 2023

Chris Paszyc, CCIM, SIOR  /   February 28, 2023

The 2023 Maine Capital Markets Outlook

Chris Paszyci, Boulos Co Partner & Broker



By Chris Paszyc, CCIM, SIOR | Partner, Broker





2022 was the tale of two halves.

I harken back to the 2017 Superbowl where the Patriots were down 28–3 in the first half. Unfortunately, in this analogy, we CRE professionals are Atlanta, and we all know how that story ends.

The first half of 2022 was red-hot: investment sale volume tripled, compared to the first half of 2021. These phenomenal results in Maine mirrored a national trend. However, just as in the storied Falcons/Pats game, this unexpected trend did not continue, and eventually fate, in the form of rising interest rates and recession fears, flipped the game, just like the Pats.

In this report, I’ll provide some quantitative and qualitative analysis to explain why this happened and offer some predictions on what the future holds. Let’s hope this article has some shelf life, and that these observations age better than the proclamations by the pundits who said the game was over at halftime.

For perspective, interest rates in the United States averaged 5.43% from 1971 until 2022, reaching an all-time high of 20% in March of 1980 and a record low of 0.25% in December of 2008. In September 2022, The Fed raised the federal funds rate by 75 bps to 3.0%–3.25%, the third straight three-quarter point increase, pushing borrowing costs to the highest since early 2008.


In case you need a reminder that you should have refinanced or sold in 2021 (courtesy of NorthMarq).

According to, the federal funds interest rate in the United States is expected to be 4.50% by the end of Q4 2022. In the long-term, the United States Fed Funds Rate is projected to trend around 4.75% in 2023 and 4.00% in 2024.

The cost of debt has risen 18–23% in 2022, with another 5–7% increase in 2023, for good measure, before rates are projected to drop in 2024. Assuming investors will demand similar returns, we see downward pricing pressure reach 10–15% over the next two years from the peak of 2021.

There will continue to be availability of investment product in 2023, assuming sellers accept the new market realities. We expect steady activity, with investors capitalizing on an opportunistic environment. In summary, if you’re a commercial real estate owner or investor, it’s time to consult with us to obtain an updated opinion and finetune your approach. The Boulos Company looks forward to working with you to develop and execute your real estate strategy in 2023.



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