WEDNESDAY, APR 13, 2022
Once known as “the other Portland,” this coastal city of 67,000 has become a destination in its own right. The center of a metro area with more than a half-million people, Portland is Maine’s largest city. Despite modest population growth of less than 5 percent over the last decade, the metro area has emerged as a hotbed of gentrification, even by East Coast standards.
Portland also was a hub for the fishing, manufacturing and agricultural industries in northern New England, but it’s shifted gears since the turn of the century. Tourism is still a relatively healthy industry here – the summer havens of Kennebunkport and Old Orchard Beach are part of the metro area, and the L.L. Bean flagship store in Freeport still draws customers 24 hours every day, seven days every week, 365 days every year – but it’s been supplemented by more high-value businesses, including banking and transportation.
The diversified economy has led to strong income gains. Although the metro area’s median household income of $72,552 isn’t much to brag about (it’s only slightly more than the national median of $64,944), it’s jumped more than 30 percent over the last decade to become one of the highest in New England. Four of the five places with the highest incomes in the state, including top-ranked Cousins Island ($167,601) are located within the Portland metro region.
Data from the 2016-20 American Community Survey show much of the increase in median household incomes has come from people moving to Maine. According to the ACS, 3.2 percent of Portland metro residents moved from a different state in the most recent year, far higher than the 2.3 percent of Americans who changed states in 2020. Almost 20 percent of the out-of-staters reported incomes topping $75,000.
The north and western sections of Portland generally are well-supplied with self-storage facilities. The 04103 zip code has 8.65 square feet of storage per person, roughly equivalent to the U.S. average. In other parts of the metro area, however, prospects are much better. The square footage per resident falls below the national average within a 25-mile radius of Portland.
Obviously, growth in the Portland self-storage market (or any other local market, for that matter) has to occur primarily along a northeast-southwest axis. Any westward expansion runs directly into the “can’t get there from here” phenomenon common to New England; the border with New Hampshire is only a little more than 30 miles from Portland, but can only be reached by a less-than-direct route that takes almost an hour.
Prospects are much better along the coast. Portland is the only major city for 50 miles in either direction along Interstate 95, located squarely between Portsmouth, N.H., and Maine’s capital of Augusta. It’s not only Maine’s largest city, it’s also Maine’s southernmost city, located almost 350 miles from the New Brunswick border town of Saint-Léonard.
The area within a five-mile radius of downtown Portland appears to offer the best possibilities for self-storage facility growth. It’s the heart of Portland’s population, accounts for the bulk of its growth, and has some of the smallest per-capita areas of self-storage space.
Like many other New England metro areas, the bulk of the metro population is located in bedroom communities within 10 or 20 miles of the metro center. In Portland’s case, inner suburbs would include Old Orchard Beach to the southwest, Gorham to the west, and Falmouth to the northeast. Further out, more distant Portland suburbs include Kennebunk, Limington, and Freeport.
Despite the limited geography, there’s an enormous amount of residential construction that has been finished, developed, or planned in the area. Since 2018, at least 3,800 housing units worth an estimated $1.55 billion have been added or placed on the drawing board within a five-mile radius of Portland City Hall; almost 5,400 units valued at $2.1 billion have been planned or built within a 20-mile radius of the metro center.
In this newsletter, we’ll examine the potential for self-storage in three Portland-area zip codes, located within a five-, 10-, and 20-mile radius of 389 Congress Street (City Hall). The zip codes were selected on the basis of a proprietary TractIQ opportunity score, based on factors that include population projections, housing construction activity, and available self-storage square footage per resident.
South Portland, Maine, Zip Code 04106
The 04106 zip code includes most of South Portland, a city of roughly 26,000 that includes Maine’s largest shopping mall and a number of mixed-use residential developments. A triangle-shaped section of land located across the Fore River from Portland, South Portland has emerged as a haven for middle-class residents priced out of “Portlyn,” as the city has been dubbed (a play on “Brooklyn,” which has had its own gentrification issues). Given its location, South Portland has a remarkably small amount of self-storage space, with only 2.45 square feet per resident – far less than any adjacent zip.
The median household income of the zip code is $66,925 –less than the metro area’s median, but topping the national figure and typical Maine household income of $59,489.
The percentage of housing units in the zip that are occupied by owners – 64.3 percent – is lower than the metro or state numbers. Instead, South Portland looks a lot more like the U.S., where 64.4 percent of housing units are occupied by their owners.
The $275,700 median value of a home in the zip is relatively in line with other zips and far more than the Maine median, which, to be fair, tends to be depressed by the large number of seasonal properties in the state that are built by their owners and used as summer camps or hunting cabins. Still, it’s far more than the national median of $198,000.
Slightly less than 58.5 percent of housing units in the zip code are single-family homes, far less than the 70.3 percent of single-family homes in Maine or the 67.7 percent in the Portland metro area. The focus for the near future seems to be on multi-family residents, according to building permit records reviewed by TractIQ. Since 2019, about 300 homes worth an estimated $93 million and ranging in size from three to 120 units have gone into planning or pre-construction stages.
Despite its proximity to the metro center, the South Portland zip code only has three self-storage facilities; a fourth, almost as large as the three combined, is located in Scarborough, just outside the South Portland zip’s border.
Gorham, Maine, Zip Code 04038
The 04038 zip code includes Gorham, a suburb of 18,000 that’s winding up on a considerable number of “best places in Maine” lists. The zip code is west of Portland and a stone’s throw from Sebago Lake, the second-largest lake in the state. The area is shaped like a diamond and bisected by U.S. 202 from north to south and Maine State Route 25, which ends in downtown Portland. It has 3.56 square feet of self-storage per person, less than half the national average.
The median household income in the 04038 zip code is $88,958, far more than the $72,552 income reported by a typical household in the Portland metro area and the U.S. median of $64,994.
More than 80 percent of housing units in the zip code are owned, rather than rented, far more than the metro average of 72.1 percent or the 64.4 percent national number. Almost 79 percent of homes in the zip code are single-family detached units – again, more than the statewide average of 70.3 percent or the national average of 61.7 percent.
Despite its relative wealth, home prices in the neighborhood tend to be in line with metro home prices. The typical house in the 04038 zip code is worth $287,100, not much more than the metro median of $273,100.
Building permit records reviewed by TractIQ show at least 100 housing units – including 73 homes — worth an estimated $27 million have been built or planned in the neighborhood since 2020.
There are three self-storage facilities in the zip code; there are a half-dozen facilities within a five-mile radius.
Biddeford, Maine, Zip Code 04005
Fairfax/Burke/George Mason University
The 04005 zip code includes most of Biddeford, a town of 21,000 located about 15 miles southwest of Portland. It is cut in half by I-95 and U.S. Highway 1 (locally, Elm Street), which run almost directly through the center of town. There are no major east-west arteries that go through the zip code.
Historically a mill town, Biddeford now has a combination of strip malls and boutique retail, including craft breweries. It’s home to the University of New England, which includes the state’s only medical school. The town, however, isn’t gentrifying as quickly as Portland. The median household income in 04005 is $57,318, less than national, state, or metro figures.
Likewise, the percentage of the zip code’s owner-occupied housing units, 51.2 percent, is far less than the national figure of 64.4 percent. The typical home in the 04005 zip code is valued at $263,100, slightly less expensive than the metro average of $273,100 but still much more than the national $229,800 or $198,000 state figures. Only 46.8 percent of housing units in the zip code are single-family, detached homes, also significantly less than the metro, state, or national averages.
Building permit records reviewed by TractIQ find at least a pair of developments with more than 430 housing units worth an estimated $105 million have been planned or built in the zip code since 2019.
There are two self-storage facilities within the 04005 zip code; there are a total of eight within a three-mile radius.
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Author: Frank Bass