PORTLAND — The note was posted shortly before Christmas at Federal Spice.

After more than 20 years at 225 Federal St., owner Eric Martin was closing the restaurant. He blamed the decision on his inability to reach new lease terms with owners MHM Management.

This month, MHM General Manager Steven Kalisz took a quick break from preparing the space for a showing to say three parties were interested in leasing.

As of this week the space remained unoccupied. But it is a type of real estate Jessica Estes, a partner/broker at The Boulos Co., said is in high demand.

“It can command a premium because it is already built out,” Estes said.

Boulos compiles an annual report on area market conditions. Along with a Maine Real Estate & Development Association presentation by Karen Rich of Malone Commercial Brokers, they conclude the Portland commercial real estate market and lease rates are robust, especially in the Old Port.

Rich said Commercial Street lease rates run between $30 to $40 per square foot, and rates on lower Exchange Street are between $35 and $48.

According to Rich, the city has more than 88,000 square feet of vacant retail space and a vacancy rate of 6.7 percent. That compares with South Portland’s 8.1 percent, 1 percent in Scarborough, and a national average of 12.6 percent.

Completion of the new WEX headquarters on Thames Street will add 10,000 square feet of retail space, and Estes said she expects the India Street area and Bayside to be in demand.

Rich and Estes said the opening of an Athleta store on Middle Street is an indicator of strong interest in Portland.

But Athleta, which sells women’s fitness apparel, is owned by Gap Inc., and its arrival is disquieting for local business owners who may not be able to compete with the deep pockets of national chains.

“In Portland, local businesses have paved the way for the city to become what it is now,” Portland Buy Local Executive Director Mary Alice Scott said Jan. 23.

Portland Buy Local has about 400 member businesses and nonprofits across the city. Members have been feeling the effects of increasing rents for several years.

“In 2016, a survey of our members showed that 77 percent were either ‘very worried’ or ‘somewhat worried’ about changes in their rents,” Scott said. Portland Buy Local is now working on a wider report about market conditions.

Last October, Rosemont Market closed its Commercial Street store near India Street, notable because the company has been adding locations in the city and beyond.

General Manager Dan Roche said Rosemont wanted to focus on a new store in Falmouth, and the Commercial Street rent was a problem.

“The new rate was significantly more than what had been paid and more than at any other location, and it has never been the highest-grossing store,” Roche said.

With low profit margins, efficiency is critical for Rosemont’s success, and Roche said other areas of the city are becoming prohibitively expensive as the company weighs creation of a distribution center.

“The amount of work we have to do to make any location do what we want to do is pretty extensive and expensive,” Roche said.

Eric Hilton, who owned Optimal Self Community Health and Wellness Center on Congress Street for about five years before it closed recently, said, “It was a very big thing for me to go and do this, it was a safe space for me to heal, as well as other people.” 

He declined to discuss his lease beyond saying it was consistent with the area, although the rent, plus credit fees, made it difficult to keep membership fees down.

“It was all on my back every month, once a month,” said Hilton, an Army veteran who served in Iraq twice and is on disability. 

David Harry can be reached at 780-9092 or dharry@theforecaster.net. Follow him on Twitter: @DavidHarry8.

The new WEX headquarters on Thames Street in Portland will add 10,000 sqaure feet of retail space in the city.