MEREDA’s 7th Annual “Strikes for Scholars” Bowl-a-Thon Fundraiser on May 23rd Raises Funds for Scholarships for 16 Maine Students

Again this year, MEREDA is excited to be able to provide $20,000 in scholarships to students pursuing studies in building trades, architecture, construction, engineering or a business program at a Maine Community College (MCCS), or the College of Science, Technology & Health at the University of Southern Maine.  MEREDA began its scholarship program for students in the building trades and professions 7 years ago and has continued to grow and support the program.

“MEREDA is a strong supporter of trades and professions associated with real estate and the real estate development industry in Maine, and recognizes how important these professions, that provide good jobs and careers, have been to our state, the economy and the real estate industry.   The building trades and professions provide high paying lifelong opportunities for our residents,” said Gary Vogel of Drummond Woodsum and MEREDA president. “An educated workforce is vital to support economic development. We are pleased to help these deserving students achieve their goals and our members look forward to the contributions they will make to our industry, our state and our economy.”

Since the fundraiser’s inception, MEREDA is proud to have raised and donated over $107,000 in scholar­ships helping 78 Maine students by making it a little easier for them to achieve their goal of obtaining a college credential.

Many thanks to our generous sponsors AAA Energy Service Co., Zachau Construction, Verrill Dana, and Mainebiz, as well as our bowling teams for supporting this worthwhile cause.  Without their involvement, these substantial donations would not be possible

Check out more photos from the event on our Facebook page!

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Maine Real Estate & Development Association (MEREDA) Announces Josh Fifield as Vice President

The Maine Real Estate & Development Association (MEREDA) is pleased to announce that Portland resident, Josh Fifield, a Senior Account Executive in the Business Insurance Department of Clark Insurance has been elected vice president.

Josh has been participating on the MEREDA Board since May 2017 and currently co-chairs its Membership & Marketing Committee, in which he has been involved since 2014.

In 2017, Josh was recognized as one of two Volunteers of the Year.  An involved community member, he is also a board member for Portland Little League and Vice Chair for Town & Country Federal Credit Union.

At Clark Insurance, a 100% Employee Owned Insurance Agency headquartered in Portland, Maine, Josh is responsible for the continued and successful growth of Clark Insurance by providing its customers with comprehensive business insurance and services. His focus is on the unique needs of Maine’s property developers and business owners. With over 115 employees, Clark Insurance offers a variety of services including Personal Insurance, Business Insurance, Employee Benefits, safety & risk consulting, and exceptional customer service.  Josh has over 15-years of experience in the insurance industry and started as an Underwriter with MEMIC.

“We are excited to have Josh participate in this new leadership role as Vice President”, says Shelly R. Clark, Vice President of Operations for MEREDA.   “His dedication, commitment, and passion for MEREDA’s mission is simply undeniable.”

For further information, please contact MEREDA’s Vice President of Operations, Shelly R. Clark at 207-874-0801 or visit www.mereda.org.

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MEREDA Brings Together Industry Leaders to Collaborate and Innovate on Housing

On Tuesday, May 7, some 300 members of Maine’s real estate industry gathered in Portland for the Maine Real Estate & Development Association’s (MEREDA’s) 2019 Spring Conference on the future of housing in Maine.  With housing at a critical juncture in Maine, MEREDA and its members are committed to finding ways to respond to existing challenges and support responsible development for the future.

“MEREDA and its members want to be part of the solution, which is why we put this important conference together,” says Gary Vogel, MEREDA President. Vogel gave introductory remarks at the conference which brought together industry leaders to collaborate and innovate on finding solutions for the housing challenges Maine faces.

The conference included a keynote presentation by Dr. Lynn Fisher of the American Enterprise Institute in Washington, D.C. Dr. Fisher provided both national and state economic data, painting a bigger picture of the housing situation.  Reflecting on the nearly 10-year economic recovery in our country, Fisher says, “Economic expansion does not die of old age,” but noted it is important to recognize that this is a mature cycle.  Fisher’s presentation included a discussion of finding ways to produce more housing at a lower price point and seeking out inventive policies to address the myriad of issues inherent to housing in Maine.

Martin Ditto of Ditto Residential in Washington, D.C. also provided a keynote and spoke about his mission to build cohousing communities as one possible solution to the housing crisis.  He urged real estate developers to think beyond merely building houses, but to help create communities where people can connect with one another.

The event also included a panel discussion with local experts Dan Brennan of MaineHousing, Matt O’Malia of GO Logic, and Hannah Pingree the Director of the Governor’s Office of Policy and Management, as well as questions from the audience.  Dan Brennan laid out the needs of Maine: “Maine needs 20,000 more affordable homes in the state.  Our most recent production has been around 300 units per year.  Our goal is to get to 1000.” On building affordable housing he continued, “We know how to do it, we’re just not doing enough of it.”

Looking to the future, Matt O’Malia and Hannah Pingree spoke on the need for more efficient homes.  O’Malia, an architect by training, has developed a sustainable insulation product made from wood fiber which will be produced in Maine and provide jobs for Mainers.  Making homes more efficient and better insulated is a goal of Governor Mills’ administration, and Pingree spoke about the challenge of keeping people in their homes and able to afford to heat them.

With the advent of tiny homes and 3-D printed homes, the panel acknowledged the need for more innovative approaches to housing. Whether or not people will want these types of homes remains a question, but thinking outside the box on how to produce affordable housing needs to be part of the conversation.  As Fisher pointed out earlier in the conference, innovation also needs to be applied to the policy side of things.  Having a few brave mayors and town councils try out different zoning policies could have a big impact on how communities can answer the need for housing.

At the end of the day, the conference showed that there are no easy answers to the housing problem in Maine, but getting the right people together in the room to discuss ideas and solutions is where we need to start. “We look forward to continuing this conversation with developers, governmental officials, lenders, brokers and homebuyers to work on turning the ideas from the conference into practice and working on additional solutions to the housing issues faced by Mainers,” said Vogel.

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Maine Real Estate & Development Association Awards Top 6 Notable Projects of 2018

Projects from Portland to Boothbay Harbor to Augusta received special recognition at MEREDA’s 2019 annual Spring Conference in Portland on May 7th.

The exemplary projects from across the state, completed in 2018, not only embody MEREDA’s belief in responsible real estate development, but also exemplify best practices in the industry, contributing to Maine’s economic growth by significant investment of resources and job creation statewide.

Each of the six projects was selected in part based upon criteria including: noteworthy and significant project completed* in 2018 (*Building Occupancy Permit must be issued by 12 31 18.), environmental sustainability, economic impact, energy efficiency, social impact, uniqueness, difficulty of development and job creation.

The recipients of MEREDA’s Top 6 Most Notable Projects of 2018 include:

  • Westbrook Housing, Westbrook Development Corporation, and Anew Development’s Riverview Terrace in Westbrook
  • Dirigo Capital Advisors’ Ballard Center in Augusta
  • Paul G. Coulombe’s Boothbay Harbor Country Club in Boothbay Harbor
  • Colby College’s Bill & Joan Alfond Main Street Commons in Waterville
  • Developers Collaborative & Sea Coast Management’s The Motherhouse in Portland
  • Bateman Partners’ Topsham Care Center in Topsham

 

 

 

 

 

 

 

 

 

For more information on these impressive projects, please click here.

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Spring 2019 MEREDA Index Commentary – THE CONSTRUCTION COMPONENT – Richard Brescia, Cianbro

Richard Brescia, Vice President of Cianbro recently provided insight for the Spring 2019 Edition of the MEREDA Index by sharing his perspective on the Construction Sector over the last 6 months. 

“In late 2018 and early 2019, Cianbro continued to see strong construction demand, including increased interest and investment from sources outside of Maine. What’s more, the demand wasn’t
concentrated in our largest metropolitan markets, but stretched statewide, putting added pressure on construction resources and – subsequently – costs.

The building market was extremely active, especially in corporate office, senior living, and
institutional markets, including healthcare, higher education, government, and life sciences. While we feel these markets will continue their momentum in the coming months and years, private development may be tempered by rising costs, particularly for labor and materials.

The driving forces behind increased construction costs can be attributed to a number of factors:

• Supply & Demand – Contractors and subcontractors are extremely busy. That means there are fewer bidders for any given project, which in turn means pricing is likely to be less competitive. Construction materials are also in high demand, affecting both pricing and availability.

• Skilled Labor Shortage – As older craft workers retire, there are far fewer young people
entering the trades to replace them. To help remedy the situation for us and our clients, we
created the Cianbro Institute where we educate our employees in a variety of trades, from
rigging and welding, to carpentry and electrical. Hopefully we’ve started a trend.

• World Economy Uncertainty – Tenuous international trade agreements and commodity tariffs have led to some significant cost spikes in widely used construction materials such as steel and aluminum. That means items including I-beams, rebar, window casings, ductwork and exterior metal panels are now more expensive.

Considering that budgets for today’s construction projects may have been developed a year or two years ago, the cost increases are sobering for owners. Looking ahead, Cianbro believes contractors can mitigate this by employing creative solutions such as lean construction principles and a colaborative construction management (CM) delivery approach.

The CM model is based on the owner and design and construction firms working together as a team from the conceptual stage through project completion. Most notably, it involves an iterative design and budgeting process that enables the project team to monitor real-time pricing at each design stage and, when necessary, make changes to materials, program or scope to attain the desired guaranteed maximum price (GMP) quoted by the constructor.

Add to that lean construction principles utilized by the CM and subcontractors, such as just-in-time material deliveries, modular components, advanced technology, smart construction practices and proper sequencing, and you have a recipe for optimal efficiency that will keep projects on schedule and within budget. In today’s robust construction market, these will likely be the keys to success for savvy owners and astute contractors in Maine.

Click here to download the full report.  For more information and a video on the MEREDA Index, please click here.

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Spring 2019 MEREDA Index Commentary – THE COMMERCIAL COMPONENT – Joseph Porta, Porta & Co.

Joseph Porta, SIOR, Broker/Manager of Porta & Co. recently provided insight for the Spring 2019 Edition of the MEREDA Index by sharing his perspective on the Commercial Sector over the last 6 months. 

With Q1 of 2019 behind us, and an active second quarter approaching, it’s a perfect time to reflect on southern Maine’s capital real estate markets. I am frequently asked; in a market where pricing is higher than it has been in over a decade how does anyone acquire investment real estate without over paying? In short,
very carefully, but more specifically, by sticking to fundamentals with an increased focus on creating value between Net Operating Income (NOI) and after-tax cash flow. Investors are managing risk by prioritizingvalue over short-term cash flow.

Limiting risk is about managing a position’s exposure to a worst-case outcome. To effectively do that late in a business cycle requires a readiness to reinvest capital, a willingness to rely on appreciation, and the patience to realize returns over longer periods of time (5-10+ years). For example, this could mean acquiring an empty building and repositioning it for a higher and better use as we’ve seen with recent redevelopments
in Portland’s Bayside neighborhood, or purchasing an asset based on its future ability to generate a higher rent as we’ve observed in Monument Square. The common denominator in both situations is an under performance of some kind where an asset’s value is not exclusively derived from its existing income.

After 8 years of economic expansion and historically low interest rates, capitalization rates have dipped under 7% for the strongest commercial assets in southern Maine. This has produced soaring valuations with pricing in some instances trading at or above replacement cost. In effect, deal pricing is equally driven by factors relating to the capital stack and financing as it is from the relationship between NOI and price. Professional operators (owners/funds) utilize financing structures where membership equity (investor) is layered onto lower leveraged institutional lending to create a less expensive cost to capital. Opportunity zones have added yet
another wrinkle to the life span of investment capital going into these designated areas. New class A office buildings for Sun Life Financial, WEX and Covetrus have been able to utilize these tax advantages, effectively opening pathways where new construction is a plausible solution.

The underlying driver of this market growth is the sustained expansion of Portland’s downtown and greater metropolitan statistical area (MSA). Entering Q2 and looking forward to Q3, we can expect a continued shift in emphasis onto internal rate of return, and the deployment of investment capital with the patience to utilize time in order to reach underwriting objectives.

Click here to download the full report.  For more information and a video on the MEREDA Index, please click here.

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Challenges and Opportunities: The MEREDA Index Tells the Story of Maine’s Real Estate Markets

Industry leaders gathered in Portland on May 7 to attend the Maine Real Estate & Development Association’s (MEREDA’s) Annual Spring Conference to discuss solutions and challenges in the future of housing in Maine.   As part of the Conference, MEREDA released its 13th edition of the MEREDA Index, a key economic indicator for the state of Maine. With increased construction costs impacting projects statewide, there are many questions as to how the real estate market will be affected.  While the Index showed a slight 2% ebb primarily because of declines in the commercial market, Index commentators see vibrant, active markets with plenty of opportunities in the future.

“I’ve always found the MEREDA Index to be an extremely valuable tool,” says Tim Soley of East Brown Cow Management, Inc.  “Not only is it a great source for measuring changes in our industry over time, but it is also a wellspring of information from industry leaders sharing their insights,” continues Soley.

Regarding rising construction prices, Richard Brescia of Cianbro says, “Considering that budgets for today’s construction projects may have been developed a year or two years ago, the costs increases are sobering for owners.  Looking ahead, Cianbro believes contractors can mitigate this by employing creative solutions such as lean construction principles and a collaborative construction management (CM) delivery approach.”

The MEREDA Index was tabulated by economist Dr. Charles Colgan and is a measure of real estate activity designed to track changes in Maine’s real estate markets.  The Index is a composite of nine seasonally adjusted measures reflecting both new development and transactions involving existing properties and it covers both the commercial and residential markets statewide.  This most recent release covers the last quarter of 2018 through the first quarter of 2019 and includes commentary from Tim Soley of East Brown Cow Management, Inc.; Joseph Porta, SIOR of Porta & Co. Commercial Real Estate; Elise Kiely, Esq. of Legacy Properties Sotheby’s International Realty, and Richard Brescia of Cianbro.

This edition of the MEREDA Index is supported by Cianbro, Porta & Co. Commercial Real Estate, SMRT Architects | Engineers, and XPress Copy

Click here to download the report.  For more information and a video on the MEREDA Index, please click here.

 

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Spring 2019 MEREDA Index Commentary – THE RESIDENTIAL COMPONENT – Elise Kiely, Esq., Legacy Properties Sotheby’s International Realty

Elise Kiely, Senior Vice President , Legacy Properties Sotheby’s International Realty recently provided insight for the Spring 2019 Edition of the MEREDA Index by sharing her perspective on the Residential Sector over the last 6 months. 

We are continuing to see robust sales activity in Maine’s residential market. 2019 has started off with relatively low inventory and strong demand across most price points. Volume of units sold may be lower in some sectors due to lack of inventory, but we are seeing some increases in sale prices. Properties in good condition and appropriately priced are seeing multiple offers with sale prices at or above list price. The pattern is similar to what we experienced last year at this time. Our spring selling window continues to start earlier in the year,
encouraging some homeowners to list their homes in January and February, as opposed to April and May in years past, in the hopes of taking advantage of less competition.

One key driver of the healthy demand in our residential market is the hiring activities at a number of Maine based companies. For example, many of our buyers are coming from new hires at WEX, Covetrus, Idexx, Tilson and Tyler Technologies, along with the traditional hiring from Maine Medical Center. These organizations are attracting talent from both within and outside the state and the region. Part of our job is showing these potential new Maine residents the advantages of living in Maine. Essentially, we are serving as ambassadors for the state, a role we are proud to embrace. Maine has a strong lifestyle brand and reputation appealing to a wide variety of different demographic groups.

I meet with people every day who are looking to move to Maine. When I ask what is bringing them to this area, the response I most often hear is…lifestyle. The traditional draws are the iconic Maine trails, mountains, rivers, and coastline; but over the past few years, the food and beverage scene has become a strong economic driver for southern Maine and cities up and down the coast.

The biggest challenge that I see going forward is affordability – both with new construction development and work force housing. Certainly, Maine offers more affordable and manageable opportunities than our larger feeder markets in Boston and New York. However, the significant increase in construction costs (from both
a severe skilled labor shortage and a rising cost in materials) is starting to impact new construction options.

It is also impacting the effort to preserve, let alone, meet the increasing demand for affordable work force housing. In order to sustain the golden goose of the food and craft brewery economic drivers for the area, we need to ensure affordable housing for the people serving in these fields. The real challenge in addressing the affordable housing need is doing it in a strategic and effective way that encourages the private sector to have
a voice in the solution.”

Click here to download the full report.  For more information and a video on the MEREDA Index, please click here.

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Spring 2019 MEREDA Index Commentary – INTRODUCTION – Tim Soley, East Brown Cow Management, Inc.

Tim Soley, President of East Brown Cow Management, Inc. recently provided insight for the Spring 2019 Edition of the MEREDA Index by sharing his perspective on the markets overall. 

I’ve always found the MEREDA Index to be an extremely valuable tool. Not only is it a great source for measuring changes in our industry over time, but it is also a wellspring of information from industry leaders sharing their insights. The Spring Index provides us with
a full look at 2018 and allows us a peek at how 2019 is setting up.

Having grown up in mid-coast Maine and been active in commercial real estate in southern Maine over the last 30 years, I have never seen such a broad-based, diverse, and robust expansion. From industrial to flex, to development land, to residential condominiums and rentals, to large companies’ office space and hospitality—the growth is unprecedented in modern times. While mostly concentrated in southern Maine, it is late in the current market cycle and the growth is demonstrating weakness. During the 3 economic cycles I have experienced in my career, people always say that “this time is different” – it never is.

Lateness is sometimes measured in years, and sometimes in frothy activity which does not
mirror the underlined fundamentals. I believe that both conditions apply now.

Maine is following a nationally choreographed path now affected by increased interest rates, international trade tensions, post tax stimulus let-down, and market cycle expansion fatigue.

For example, in Portland I see this represented by stagnant office demand from the typical
1,000 to 3,000 square foot office tenant. We also see residential condominium demand
begin to slow.

Having said all that, and having no crystal ball telling me when the recession will occur, I have never been more excited about the fundamental and foundational potential of the real estate economy focused in southern Maine. I see unprecedented opportunity in elevating the level of design and construction quality in Portland’s built environment.

There are geographic locations of strengths in specific industries or businesses, but nothing broad-based. One of the differences about this expansionary period is that Maine has not seen uniform growth statewide.

Quality of life, a mantra heard here for a couple of decades, is bringing young workers and
older retirees to live here. Tourism has never been greater or as seasonally diverse, and
provides possibilities. Tourism is one of Maine’s largest industries, therefore most important exports. In our relatively rural, economically disadvantaged state, tourism provides our best opportunity to export our tax burden. Finally, large, growing companies are either expanding outposts here, or are willing to call Portland, Maine their home. I see opportunity in the cyclical dark clouds ahead.

Click here to download the full report.  For more information and a video on the MEREDA Index, please click here.

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MEREDA’s Morning Menu Breakfast Event – The State of Housing in Bangor

Housing has become a large topic of conversation in service center communities across the state.  Businesses, families and individuals are being impacted by Maine’s recent economic trends; rising construction costs, rental affordability challenges and limits on the supply of both market and affordable housing options are hampering communities in different ways.

An overview of recent portfolio sales of apartment properties, in the Bangor market, will be presented.  In addition, a regional summary of multi-family housing development will be provided.

Make plans to join MEREDA in Bangor on June 4th at Hollywood Casino to learn about Bangor’s recent months-long study of its housing issues and hear about what City officials and area partners are doing to impact the supply, quality and affordability of housing in the Queen City.

About the Event:

June 4, 2019 – 7:30 – 9:00 AM

Hollywood Casino Bangor
500 Main Street
Bangor, ME

Breakfast: 7:30 – 8:00 AM
Program: 8:00 – 9:00 AM

Our Presenters:

Philip S. Drew, City Assessor has been serving in his current position since January 2015.  He is responsible for all aspects of the day to day operation and long term planning of the Assessing Department, managing the departmental personnel, and conducting assessments of personal and real property for the City of Bangor.

Philip currently, serves as a board member of the Maine Chapter of the International Association of Assessors. Philip lives in Glenburn with his wife Mary.

Jeff Wallace, a graduate of Maine Maritime Academy, has worked for the City of Bangor for ten years.  During the first nine years he managed the City’s home repair program; said program provided low interest loans to Low to Moderate Income homeowners to complete needed repairs.  He has been a certified Code Enforcement Officer since 2014 and the Director of Code Enforcement since April, 2018.  He lives in Bangor with his wife Kristen and two children, Zachary and Sarah.

Jason Bird is the Housing Development Director for Penquis.  Jason oversees an existing portfolio of over 300 units of affordable housing in the Eastern Maine region and is responsible for developing new affordable housing and acquiring existing rental housing properties.

Before joining Penquis, Jason worked for 10 years doing community and economic development at the municipal and regional levels. Jason holds a Bachelor of Arts in Political Science and a Masters of Public Administration, both from the University of Maine.  He currently serves on the Board of the Maine Affordable Housing Coalition.

Registering for this Event:

Your RSVP is requested by May 28, 2019. Payment is expected at the time of registration. No refunds will be granted  to anyone who registers, but fails to attend or who cancels after May 28, 2019.

Ticket Prices:

Members: $25 each | Non-Members: $35 ea
Prices increase by $10 after May 28, 2019

This MEREDA Morning Menu Breakfast Event is Sponsored by Bangor Savings Bank, Bowman Constructors and the City of Bangor. 

Visit www.mereda.org for more information and to register.

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