Maine’s Retail Landscape: Resilient, Refined, and Ready for What’s Next

Maine's Retail Landscape: Resilient, Refined, and Ready for What's Next

By Derek Miller | Partner, Broker

The retail sector continued its run as the most durable and consistent performer among the traditional real estate asset classes in 2025. While office continues to lag below pre-COVID occupancy levels (less so in Maine than nationally, I might add) and industrial demand has plateaued, retail has remained remarkably resilient-both in terms of leasing activity and investor appetite. This is welcome news for a sector that has spent the past several years grappling with store consolidations, a wave of bankruptcies and closures (headlined by Joann and Big Lots in 2025), and the ongoing shift toward online shopping and the age of Amazon.

Nationally, retail vacancy rates are at or near their lowest levels since CBRE began tracking the sector in 2005, currently estimated at roughly 4.6%. The market's resiliency is driven in part by limited new construction and sustained consumer demand for brick-and-mortar shopping. Construction costs have created a bottleneck for new retail development, with new shells often running $300-$500/SF, meaning only a handful of markets in Maine and New England can justify ground-up projects. This dynamic has kept demand strong for existing centers. And while there are fewer high-quality national retailers in expansion mode-and those that are know the leverage they wield-we continue to see competitive demand for 20,000-40,000 SF vacancies across northern New England, particularly when anchored by grocery or value-driven retailers. Ocean State Job Lot has been very opportunistic in filling the void created by Big Lots' closure, both in purchasing leases through their bankruptcy and signing new deals. In Maine, we have also seen bargain retailers Renys and Marden's add locations in the past year. The former Joann's suite at the Topsham Fair Mall was leased by a local furniture retailer after a very short marketing campaign. I expect this trend to continue and keep upward pressure on retail rents, especially in Southern Maine where demographics are strongest.

In conversations with several large landlords in Maine and New England, a consistent theme that emerged was the continued growth and expansion of "med-tail" businesses and the broader health and wellness sector. This subset
includes med spas, dental and veterinary practices, and traditional medical providers that seek to be closer to the patients they serve, such as infusion centers and dialysis clinics. Landlords have welcomed this shift, as these tenants
tend to be highly "sticky"-meaning that, due in part to the expense of building out their spaces, once a location is open and profitable, relocation is rare. This trend has also allowed retail landlords to further diversify tenant mixes within shopping centers, reducing exposure to the more dynamic and sometimes volatile nature of traditional retail. While large-scale conversions of retail to medical can be challenging due to unique infrastructure requirements for larger practices, most of the recent expansion has occurred in smaller suites under 10,000 SF, with the 3,000-6,000 SF range emerging as the sweet spot. Many of these groups are well capitalized, tend to grow through private equity, and are less sensitive to rent per square foot than traditional soft goods tenants.

The grocery sector remains the dominant force in the retail landscape, as centers anchored by daily-needs providers consistently outperform those without them. To that end, we have seen continued expansion from regional powerhouses like Hannaford and Market Basket in Maine-Hannaford with new smaller-format stores in rural locations, and Market Basket with a new-construction flagship planned at The Downs development in Scarborough. A new entrant to the market, Aldi, has gained traction with its smaller, more nimble footprint (typically 10,000-20,000 SF), allowing it to break through traditionally high barriers to entry. Aldi has leased a Portland location and has additional expansion plans underway. In Brunswick, Hobby Lobby has leased a large portion of the former Sears box at the Cooks Corner Shopping Center-anchored by Hannaford-and is slated for a Q2/Q3 2026 opening. In addition to their strong leasing draw, grocery-anchored centers in secondary and tertiary markets have captured disproportionate investment attention, often trading at tighter cap rates than comparable strip centers in the same markets.

Against a backdrop of macro uncertainty, higher interest rates, and shifting consumer behavior, the retail sector has proven once again that it is far more adaptive than many predicted. The narrative of a "retail apocalypse" continues
to fade, replaced by a more nuanced and durable model: smaller footprints, diversified tenancy, medical-adjacent uses, and an emphasis on convenience-based shopping. For Maine and New England, the story is less about reinvention
and more about refinement. Retail here has never been defined by sprawling mall developments or overbuilt corridors; it has been measured, pragmatic, and anchored in locally tailored demand. As consumer expectations evolve and developers chase yield, our region is well-positioned to continue outperforming-quietly, steadily, and in ways that reward both investors and occupiers willing to engage with the retail landscape here in Maine.