Over the next six months, online seafood retailer Maine Lobster Now will be packing up in Portland and moving to a 17,000-square-foot warehouse just off Industrial Park Road in Saco.
Business owner and founder Julian Klenda is excited about the move. As he walked around the recently purchased building at 47 Spring Hill Road in Saco in early December, he talked enthusiastically about where the giant walk-in freezer, 500 lobster crates and assembly lines for seafood processing and packaging will be placed.
Klenda said Saco has everything his company needs – at a lower price.
“Portland is very expensive,” he said. “The real estate costs in Portland are high, and in Saco there’s still some property available, some land available with adequate zoning, which is important. I think that’s what’s driving people to Saco. Obviously the cost of the building was attractive – it was lower than it would be in Portland.”
Maine Lobster Now is paying $1.5 million for the property, built in 2000, and planning to invest an additional $1 million in renovations. At about $85 per square foot, that’s a historically high purchase price for Saco warehouse space, but still much cheaper than buying in Portland – where sale prices for similar properties have exceeded $100 per square foot – or building from scratch.
As breweries, cannabis cultivation and extraction businesses, coffee houses and other retailers continue their takeover of Portland’s prime industrial locations, more businesses that rely on warehouse or manufacturing space have been looking to Saco as a lower-cost alternative. Of the eight major new-construction projects cited by NAI The Dunham Group partner and broker Justin Lamontagne in his most recent annual report on the Portland-area industrial real estate market, six were in Saco.
“Any manufacturer or warehousing or distribution company likes Saco because, No. 1, its location has got fantastic proximity to (Interstate) 95 – I mean it is right off Exit 36, and boom, you’re in the (industrial) park,” Lamontagne said. “That, for logistical reasons and drive times and energy costs, and for all the things you can think of for obvious reasons, is very appealing to industrial users.”
Other benefits include Saco’s relatively new industrial buildings – most built within the past 40 years – as well as its business-friendly policies, flexible zoning and access to utilities such as natural gas, high-amperage power, water and sewer, he said.
“Those are all readily available in that (Saco industrial) park, and not necessarily readily available everywhere else, believe it or not,” Lamontagne said. “When it comes to seafood processing in particular, that is a requirement. You’ve got to have access to municipal water and sewer. You can’t have private septic or anything like that.”
He said Saco wisely invested in natural gas infrastructure in and around Industrial Park Road a few years ago, which also has made a big difference for businesses in the area.
According to Lamontagne’s 2018 industrial real estate report released in January, the vacancy rate for warehouse, manufacturing and distribution properties in Saco was just 0.7 percent that year, much lower than the Portland area’s average vacancy rate of 3.5 percent. Portland’s vacancy rate for industrial properties was 5.5 percent in 2018, it said.
Denise Clavette, Saco’s planning and development director, said the industrial park area has been almost completely built out, and that Maine Lobster Now was only able to move in because another business, LED signage maker Cirrus Systems Inc., vacated an existing building. However, Clavette said, there is still industrially zoned land available in other parts of the city, such as along Route 1.
One recently completed construction project in Saco houses what is now the state’s largest lobster processing operation. Portland-based Ready Seafood built a $10.5 million lobster processing, storage and research facility on a 40-acre lot on Route 1 in Saco, where it can handle 100,000 pounds of lobster per day.
Owners John and Brendan Ready have said they believe Saco was the right place for their young staff to grow along with the company. Their team members can buy relatively affordable houses in Saco, close to where they work, and send their children to the city’s quality schools.
Another commercial project that broke ground along Route 1 in Saco this year is a $5 million Hancock Lumber facility on 11 acres at 941 Portland Road that is slated to open this spring. The Casco-based business said the new Saco location will better connect it geographically to its customers in the construction industry and create a more contiguous presence in southern Maine.
Clavette said inquiries from businesses looking to buy, build or lease locations in Saco have ramped up considerably over the past year.
“It’s coming at a very rapid pace,” she said. “We’re getting anything from three to five inquiries a week.”
That increase is reflected in the amount of investment that businesses have made in Saco commercial buildings over the past year, said Dick Lambert, the city’s director of code enforcement. Lambert said as of early December, businesses had invested $41 million in commercial building projects in the city in 2019, up from $28.5 million in 2018 and $13.5 million in 2017.
“This year, we’ve hit a slew of new industrial and commercial building starts,” he said. “We’re busy – that’s all I can say. We’re running around.”