Changes ahead for commercial real estate market in wake of pandemic
The COVID-19 pandemic has forced a reshaping of the commercial real estate market in New Hampshire. Developers said the commercial vacancy rate is high due to the pandemic. “Typically a strong commercial market is 10-15% empty,” said Dick Anagnost, commercial real estate developer of the Anagnost Companies. “We’re likely – if you look at it across the board, including the big box retail and the offices that are idle and shrinking – likely 20-25% empty,” Anagnost said New Hampshire has been pretty stable since Office workers have moved to a more remote area. He said the retail landscape will be similar to the post-recession era more than a decade ago. Empty commercial properties could be sublet, Anagnost said: “The absorption will happen because construction costs are literally off the charts,” he said. “The escalation is unbelievable, so nothing new is being built, which means that existing stocks can be absorbed.” The decline in stationary retail is also being redefined. Brady Sullivan’s Arthur Sullivan overhauls an empty Massachusetts mall. “We’re redesigning that into part of self-storage,” Sullivan said. “Part of that will be a medical center. Part of that will be city offices. So think outside the box.” Anagnost said small storefronts will also make a comeback. “There are many people out there who have started small businesses during the COVID who are moving into the retail sector, so there is a high demand for small retail stores,” he said. Anagnost said it could take a few years or more for all of the changes to complete.
MANCHESTER, NH –
The COVID-19 pandemic has forced a reshaping of the commercial real estate market in New Hampshire.
Developers said commercial vacancies are high due to the pandemic.
“Typically a strong commercial market is 10-15% empty,” said Dick Anagnost, commercial real estate developer of the Anagnost Companies. “We’re likely – if you look at it across the board, including big box retail and offices that are idle and shrinking – likely 20-25% empty.”
Anagnost said New Hampshire has held up fairly stable as office workers moved to a more remote area. He said the retail landscape will be similar to the post-recession era more than a decade ago.
Empty commercial properties could be sublet, Anagnost said.
“The absorption will take place because the construction costs are literally off the charts,” he said. “The escalation is incredible so nothing new is being built, which means that existing inventory has a chance to absorb it.”
Declines in stationary retail are also being used again. Brady Sullivan’s Arthur Sullivan overhauls an empty Massachusetts mall.
“We’re redesigning that into part of self-storage,” Sullivan said. “Part of that will be a medical center. Part of that will be city offices. So think outside the box.”
Anagnost said that even small shop windows will make a comeback.
“There are many people out there who have started small businesses and are moving into retailing during COVID, so there is a high demand for small retail stores,” he said.
Anagnost said it could take a few years or more for all of the changes to complete.