Brice O’Connor / July 11, 2018
Portland is the economic epicenter and most densely populated city in Maine.This area of Greater Portland, especially downtown Portland, has become a desirable office location for many businesses. Although Portland has many benefits for businesses and their employees, it’s important to examine all options when deciding the best location for your office. The suburbs might have benefits that the downtown area simply cannot offer. Here are four things to consider when deciding between an office in downtown Portland and an office in the suburban markets.
Ample parking and the cost associated with it can often be underestimated or forgotten when selecting office locations. Parking on Portland’s peninsula continues to be a dilemma with significant waiting lists for most garages and surface lots ranging anywhere from a month to over a year for available spaces. You may be fortunate enough to lease space that has its own designated parking in a nearby garage or surface lot, but be sure to understand the cost associated with that parking. Monthly fees for parking spaces in downtown garages or lots range anywhere from $80 to $170 per space per month, adding about $1,800/year per employee in expense. Divide that by a typical allowance of 200 SF per employee and we see a “parking premium” of $9/SF.
Those who do not have designated parking run the risk of having to feed the meter and play “parking musical chairs” every two hours to avoid the dreaded ticket under the windshield wiper or the boot for serial offenders.
It’s important to know your client base. How much visibility and accessibility do you need to retain and expand your client base? Where are your clients located? How often are clients coming to your office? How often are you going to their office?
If a majority of your clients do business downtown and you’re frequently holding meetings in the downtown area, it may be most efficient for your offices to also be located downtown. If you do most of your business over the phone or through e-commerce, being in the heart of the city probably isn’t necessary. Furthermore, if most of your clients, customers or patients (for medical users) are in the suburbs, they would most likely prefer to avoid the traffic and parking frustrations of the city.
Knowing where your employees reside and their ideal office location is crucial to the sustainability of your business. For some businesses, downtown office space is a vital way to attract and retain employees who appreciate the “vibe” of the city. Employees may also prefer downtown for more practical benefits. A client who has done business downtown for several years was recently in search of new office space. They were presented an opportunity to relocate off the peninsula to the Portland/Westbrook line. This new space fit all facets of their criteria except workforce accessibility; a majority of their employees lived downtown and commuted by foot, bike, or public transportation. Moving off the peninsula meant potentially losing these employees. For this company, retaining quality employees was worth the premium costs of downtown office space. Our company can assist organizations searching for office space with mapping tools to assess and plot employees’ home addresses and commuting times. This mapping analysis can help in the relocation or new location decision-making process.
Another critical component is establishing a budget and knowing what makes financial sense for your business. Downtown Portland can be an attractive place with its endless coffee shops, restaurants and amenities; however, it may not be worth the premium to your operations to pay the additional downtown cost for these amenities. Lease rates for Downtown can be $3 to $8 more per square foot then that of a comparable property in Falmouth, Yarmouth, South Portland, Westbrook or Scarborough.
Additionally, you should note that downtown rents are typically quoted in terms of a “modified gross” rate that includes operating costs whereas suburban rates are typically quoted on a “triple net” basis that does not include operating costs, even though the tenant will be separately charged for those costs. Your broker can help you work through these important nuances and give you an apples-to-apples comparison.
For some, a downtown presence is crucial to functionality of their business and the benefits outweigh the additional costs. Some companies see the amenities as crucial for attracting and retaining top talent when competing with companies or firms in larger cities like Boston and New York. For other companies, very attractive opportunities can be found in the suburban markets with convenient access to commuter routes, less expensive and more plentiful parking, and access to suburban shopping and restaurants in the outlying communities. Do not let the bright lights and shiny buildings blind you from excellent potential alternatives which may make for better options for your particular business, employees and clients.