Granite State’s commercial real estate market heating up | Economy

The commercial property at 55 Crown St. in Nashua has been up for sale since 2017 with little interest. “It’s a one-of-a-kind property that has been on the market for four years,” says Kathy DeMello, real estate agent at Berkshire Hathaway in Londonderry, describing the 7.6 hectare site with a rail connection and a 3,000 square meter production building.

“We had a couple of offers during that time, but my phone rang for this one since the beginning of this year. I showed it yesterday and am expecting an offer today, ”she says. Even long-established industrial properties such as 55 Crown St., which have to be removed from asbestos, are confiscated at record speed in what is known as a “scorching hot market” for industrial land and buildings.

COVID-19 has made winners and losers in the US economy, and one of the obvious winners is the market for industrial space, especially warehouse and logistics space. The shop-at-home phenomenon, which was already increasing before the pandemic broke out, has accelerated for warehouse space in ways that no one could have predicted before COVID.

“The industry was one of the most resilient real estate sectors in the midst of the COVID-19 crisis, carried by rising e-commerce demand,” said Coldwell Banker’s (CBRE) real estate market outlook for 2021. “This has put pressure on retailers, wholesalers and outside logistics companies to reach consumers while reducing transportation costs.”

The Federal Association of Industrial and Office Parks sees the trend even more exuberantly and reports at the end of 2020 that 2021 could be a parade year for the not-so-sexy industrial market.

“Investing in industrial real estate is hot as the continued growth in consumer online shopping increases the need for additional storage space,” according to the NAIOP report. “Industrial real estate – including factories, warehouses and distribution facilities – has been the asset class of choice in recent years and demand is growing.”

Recent headlines in the NH Union Leader get to the heart of the matter. A new cargo facility is planned for the Manchester-Boston regional airport, while developers are proposing a huge rural distribution center on Interstate 93 in Hooksett, directly on the freeway.

Another developer is proposing a 595,000-square-foot distribution center and 150,000-square-foot warehouse / industrial building across the street at 39 Hackett Hill Road, where Portland-based Shipyard Brewing has a $ 36 million worth of brewing and packaging facility plans.

Then there is the planned Hudson Logistic Facility with 363 loading docks in three separate buildings on land that was once a golf course on the Merrimack River. Amazon will take up most of the space.

“It is absolutely booming,” says Jesele Zurell, Marketing Director at HL Turner Group, an architecture and engineering office based in Concord.

Paul Roy, Director Business Development at PROCON in Hooksett, sees a similar trend. The design building company, which is best known for its hotel projects, is also riding on the wave of bearings. “We are currently looking at some large industrial warehouses that can be up to 42 feet clear,” says Roy. “There is a lack of logistics centers in New Hampshire, especially with this clearance. We’re looking at half a million square feet in various projects, mostly in the southern part of the state. “

Not only storage space is met with so much interest. With economists predicting a strong economy in the near future, manufacturers of all kinds are trying to position themselves to capitalize on expected growth.

“We see a lot of companies starting or expanding businesses in New Hampshire,” says Zurell. “We see customers responding to us about buildings they can use in manufacturing for the military, high-tech and automotive industries. There was definitely a lot of new interest last year. “

Also related to the pandemic is the growing interest in cleanrooms for industries that require high levels of control over air quality, dust and other contaminants.

“Something like that would be necessary for manufacturing medical devices or working on vaccines,” says Zurell. “It’s not your average building project. There are many steps to be taken. We specialize in this and are in great demand. “

There is also a demand for smaller industrial areas, in particular for what DeMello calls “Contractor Bays”. Units in a Carl Drive development in Manchester sell like hot cakes, she says. They are approximately 1,200 to 1,500 square feet per unit, with office space in the front, loading docks in the back, and work area in between. The well-equipped office areas and mezzanines, large sectional doors, drive-in shafts and high-bay industrial areas are popular with building contractors. “If we had an inventory of them, they would fly off the shelves,” says DeMello.

However, home improvement projects keep many contractors busy. “Contractors are so busy now because people who are stuck at home want to do home improvement, and when they want to work from home, [they] need to make some changes, ”she says. “Available space for conversion to home office” has meanwhile become a standard pitch in residential property advertisements.

The trend towards renewable energies is also contributing to the explosion in large-scale construction. Turner Group recently completed a solar array on the roof of health science company Millipore at the company’s manufacturing facility in Bedford, Massachusetts. It is the largest commercial solar array in the Bay State.

“We have a number of engineers on the staff who are LEED [Leadership in Energy and Environmental Design] certified, ”says Zurell.

All of this activity in the industrial real estate market is beginning to eat up the available industrially demarcated space, according to Matt Lefebvre, commercial real estate agent at Elm Grove Realty in Manchester.

Nashua Millyard, for example, which has been languishing for years, has aroused new interest with the completion of Broad Street Parkway and is filling itself up. “Maybe not like Manchester Millyard, where you’ve seen incredible growth in high tech, education and medicine, but you’re seeing remodeling in some of the latest outliers in buildings,” says Lefebvre.

“I looked at a room at 1 Chestnut St., which is a large building in the area, and it’s almost completely filled with different businesses, either offices or industrial space,” he says.

A mill building at 88 Pine Street, Nashua, built in 1840, has just been sold to a Boston developer, and the city is considering the former NIMCO building in Nashua for industrial redevelopment. Nashua’s Millyard District Development Plan calls for the building to be “remodeled to create a central place for entrepreneurship – a multi-business incubator, but with a focus on precision manufacturing, healthcare technology and software.”

New Hampshire does not have much industrial zone with public utilities and motorway access. What exists is quickly devoured, says DeMello. “Nashua Millyard and Continental Boulevard in Merrimack … you can usually find something there for small manufacturing facilities,” she says, “now it’s really a small selection.”

With Pease Tradeport in Portsmouth practically developed, the hot spot is now the area around Manchester-Boston Regional Airport and Pettingill Road, where the City of Londonderry decided in 2014 to expand its utility facilities and otherwise develop 1,000 hectares of industrial land.

The new 142,000 square meter distribution center for Bellavance Beverage Co. on Pettengill Road is the sixth major tenant, alongside the UPS Northeast Logistics Center and FW Webb, to have been signed in the past five years.

With this wave of new industrial construction, there is a new look at industrial architecture, says Zurell. “It can be a large metal box if you wish, but we have a lot of industrial customers today who want the curb to be attractive,” she says.

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