Maine’s Midcoast Commercial Real Estate Market Update: 2024

By Roy Donnelly | Associate

There is no doubt that Maine’s Midcoast region benefitted from relocation trends spurred by COVID and the subsequent run-up in values. Population growth rates between April 2020 and July 2022 in four Midcoast counties equaled or outpaced that of Cumberland County, which grew at 1.4%. Knox County (home to Camden and Rockland) grew at 1.4%; Waldo County (home to Belfast) grew at 1.6%; Sagadahoc County (home to Topsham and Bath) grew at 1.9%; and Lincoln County (home to Damariscotta and Waldoboro) grew at 2.8%.

Where does the region go from here? Many new residents are retirees, attracted to the proximity of the ocean and way of life, or remote workers with few roots in the area. While in-migration is beneficial, the demographic makeup of those moving to the Midcoast does not necessarily align with employers relocating, or retailers viewing the region as a hub of consumption. New construction has been heavily tilted toward single-family homes and vacation properties, rather than industrial plants or retail hubs – and with a higher proportion of second homes, the region faces affordable housing challenges. Finally, the case for business growth in the Midcoast is hamstrung by a comparatively older labor force and rocky, uneven ground across large swaths of the region that make new development difficult to site.

Despite these challenges, the Midcoast stands to benefit from a few tailwinds. Because of its proximity to oceanfront real estate and the attractively dense and picturesque nature of many towns along Route 1, the region should see continued residential interest from white-collar workers and wealthy retirees. The region is continuing its fishery traditions with an aquaculture industry rooted in oyster and kelp farms, as well as salmon operations in development in Bucksport and Belfast. This will provide not only a valuable export but also a reason for young workers to stay in the area. Boatbuilding, while not what it once was in the region, is a stalwart industry, anchored by Bath Iron Works and supported by access to deep-water harbors and rivers and a reputation for quality born from experience.

Driven by the attraction to the rocky coastline and Acadia National Park, hospitality and tourism will continue to be the leading industry in the Midcoast. The newly constructed Rockport Harbor Hotel, slated to open in winter 2024, is a 20-room boutique hotel with two restaurants, incorporating designs consistent with historical standards. In Rockland, the Tradewinds Inn was sold to an out-of-state developer with designs on updating the building’s aging electrical infrastructure and fifty-six rooms. In addition, the 94-room Harraseeket Inn in Freeport traded for a high-water mark in the area.

In part because of lower population density, it can be difficult for national retail, industrial, and office tenants to find their spot in the region. However, Barnes & Noble’s July opening in Brunswick (its first new Maine location since 1995), DuPont’s renewed 88,000± SF lease for its carrageenan operation in Rockland, and Athenahealth’s continued activity in Belfast underpin national interest in a market typically made by a handful of local and regional players.

As with much of the state, continued development on the Midcoast will be tempered in the short-term by the increased cost of debt and in the medium-term by an aging workforce with many skilled tradespeople retiring. However, as Portland and Cumberland/York counties continue to approach their carrying capacity, the way of life that exemplifies Maine can still be found heading up the coast on Route One.

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