NH commercial real estate has lingering questions
Published: 01/30/2021 7:59:20 PM
For commercial real estate in New Hampshire, the outlook for different sectors is mixed. The industrial market still looks strong, but the demand for office space is unclear.
That’s the verdict from Colliers International, which released its Q4 Market Insight report.
The report indicates that as of early 2020, New Hampshire office and industrial market occupancy was heavy – over 92%. After a year of pandemic, letting rates remain at 90% – a “slightly comforting figure,” the report said – but big questions remain about how the COVID-19 pandemic will affect commercial real estate.
According to the report, it is still unclear which direction the office market will head in as New Hampshire is further from its initial pandemic-related shutdown as many companies wait to make decisions about their future office plans and needs, as work from home draws closer to being an integral part of both employers and employees.
At the end of the year, the occupancy rate of office space fell from 91.7% in the previous year to 90.5%.
However, according to Colliers’ New Hampshire Office Market Insight report, the drop in occupancy may not be as significant as expected. “It is likely that more space will come onto the market in 2021.”
And despite the drop in occupancy, rents rose 28 cents per square foot – an increase of 1.5% – and ended the year at $ 19.01. Much of the increase is due to new high-end space hitting the market, according to the report.
The industrial market looks a little better, according to the New Hampshire Industrial Market Insight report.
The market remained strong and ended the year with a 95.6% occupancy rate after rising in the fourth quarter. Total rents were $ 7.05 per square foot, up 51 cents year over year.
The report notes that in the cheap homeowner market, some bespoke projects were announced during the quarter, suggesting a surge in industrial construction over the next year. These include the Hudson Logistics Center, which is being built on the Green Meadow Golf Club site in Hudson, and the Granite Woods Commerce Center project, which is applying for permits in Hooksett.
In addition, The Flatley Company laid the foundation stone for its Nashua Micro-Tech Center, which will comprise three single-story buildings with a total of 38,000 square feet designed to attract life science and biotech companies.
According to the report, “the occupancy of the industrial market will remain high in 2021 and as new projects are proposed the space could be filled quickly.”
These articles are shared by partners in The Granite State News Collaborative. More information is available at kollaborativeh.org.