Maine’s Industrial Markets in 2026

By Jon Rizzo, SIOR | Partner, Broker

Sales

There were limited industrial investment sales in 2025, primarily due to three factors:
1. Seller complacency – content owning the portfolio with no need for a disposition
2. Low in place cap rates – deals not “penciling”
3. Limited inventory – smaller sized market with limited supply

Despite lower sale volume, continued interest from owner operators helped maintain the sale price per square foot levels we’ve seen over the last few years. The lack of available inventory persists and new construction continues to be an issue from both a cost and timing perspective. This theme extended from 2024 into 2025 and is unlikely to ease in 2026. With stagnancy comes opportunity. The fact that interest rates slightly declined and debt markets remain bullish in the industrial sector translates to stronger buying power. This is a favorable market for industrial real estate owners looking to sell.

There seems to be a recurring thesis for investment groups. Location, location, location—the age-old staple in real estate remains as true now as ever before. Investment groups are chasing sites that are strategically located, easily accessible from major transit routes, and include plenty of land area for either outdoor storage or future development. Building and structure specifications are
certainly contemplated during a purchase. However location, infrastructure, and appropriate zoning appear to be higher on the investment criteria checklist than the building itself. The decision to enter a deal ultimately boils down to being at the right cost basis, as there is a ceiling to what a tenant will pay for a site and that balance is needed to keep the market healthy.

Leasing

Industrial leasing in 2025 was very similar to 2024. From a macroeconomic perspective, the industrial market saw negative absorption in the second quarter of 2025, the first negative quarter in over 15 years per Newmark’s Q2 2025 U.S. Industrial Market Conditions & Trends report published in August, 2025. The industrial sector in Maine has remained somewhat stagnant. Strong demand for smaller flex space persists while larger, older product availabilities have stayed soft. Many of the large vacancies we saw in 2024 carried over to 2025 as well. The patience trend continues as tenants adapt to work with their existing space while evaluating a better longer-term solution—they are not settling for older vintage availabilities.

I see two driving factors for this stagnancy:
1. Market uncertainty, both from a workforce and space needs perspective
2. Desire for flexibility

Companies are working smarter by automating operations (e.g. artificial intelligence and robotics) or optimizing space (i.e. less square footage needs through process efficiency). This type of planning takes time, therefore companies are unwilling to commit to a long- term lease in a build-to-suit until growth and strategic plans are finalized. There is also a lack of infrastructure to support these automations and optimizations. Artificial intelligence requires significant power, which is hard to come by (or extremely cost prohibitive) in the state of Maine. This hurdle leads to the desire for flexibility. Tenants that are out of space, or in an inefficient space, will make do until their plans are solidified. This trend is resulting in increased renewals or short-term renewals, which landlords are willing to accept in a softened market. The lease rates seem to be holding somewhat strong with no significant decreases, but activity has undoubtedly slowed.

Looking ahead to 2026, creativity will be key to capitalize on the right deals. The Boulos Company’s advisors offer insight and ingenuity while navigating this process and identify the right levers to pull to get these deals done.