PORTLAND – In a market where one out of every eight square feet of commercial space is vacant, the power during rental negotiations has clearly shifted from landlords to tenants.

And some tenants are using that newfound power to swing some good deals.

“It’s definitely a tenants’ market,” said Jim Harnden at Malone Commercial Brokers.

For instance, the Portland Regional Chamber recently signed a lease to move from Pearl Street, on the edge of the Old Port, to 443 Congress St., right across from Monument Square.

The move will give the chamber a more visible location, the building’s whole first floor and savings on rent of about $30,000 a year, said Godfrey Wood, the organization’s chief executive officer.

In addition, the landlord, JJR 443 Congress, agreed to essentially demolish the interior space and build it to the chamber’s specifications.

“We like the visibility and member access” of the new location, Wood said.

Others have announced moves in recent months. The law firm Pierce Atwood, for instance, will be moving from One Monument Square to a new headquarters building being fashioned from the old Cumberland Cold Storage Building on the waterfront, a move facilitated by a big property tax break from the city to the developer, Waterfront Maine.

Late last year, MaineHealth purchased 110 Free St., consolidating operations from three different leased locations around the city.

But despite some moves, vacancies remain stubbornly high, particularly along the stretch where the chamber is headed and which Pierce Atwood is departing.

The building the chamber is moving to is an exception, said Josh Benthien, one of three partners who bought the building in February.

At the time of the transaction, Benthien said, the building was more than half empty. But that kept the price low enough to give the new owners some flexibility on lease rates, he said.

“We were able to buy it at a price where we could be competitive with our rent and we’re in it for the long haul,” he said.

“I kind of like the creativity of putting a deal together,” Benthien said, noting that the owners were able to obtain a 10-year lease with the chamber.

Flexibility and creativity are the hallmarks of any commercial landlord who is able to bring in a new tenant at a time when citywide vacancy rates are above 12 percent, Harnden said.

He said most companies believe the market is about as soft as it’s going to get, so if they want to move — either to a bigger space or simply a better address — business owners are likely to do so soon.

“They feel as though we’re at the bottom and there won’t be another shoe dropping” to send rents any lower, he said. “It’s an opportunity to take advantage of the situation and lock into some attractive terms.” That situation doesn’t come often in Portland, Harnden noted.

He said larger markets are often more volatile, and it’s not uncommon for rates to move, up or down, 10 percent or more a year. Portland, by contrast, rarely sees lease rates change more than a few percentage points a year.

“For the first time, landlords have been cutting deals,” said Joseph Porta with CBRE/The Boulos Company. Tenants “are using their leverage to get better space and control their overhead, long term.”

Both Porta and Harnden said some companies see that as something they can achieve more easily off of the Portland peninsula.

One key factor is parking, which runs about $100 a month per space in downtown Portland. So a company with 50 employees is looking at an additional expense of $60,000 a year.

“It’s a cost that needs to be picked up,” said Harnden, but off-peninsula and in suburban office parks, parking is typically free, they said.

Issues like that, Porta said, are causing some tenants to look outside Portland when it comes time to move.

So some larger tenants are moving out, and landlords are having to fill big spaces with a number of smaller tenants.

“Congress Street is in transition from a place with the top rents and Class A buildings to a place with smaller tenants, one floor only,” Porta said. “It will depend on the creativity of the landlord. That creativity will be the key to filling spaces.”

Staff Writer Edward D. Murphy can be contacted at 791-6465 or at:

emurphy@pressherald.com