As many business owners are excited to distance themselves from 2020, the “wait and see” trend seems to be ending and commercial real estate decisions are being made. The office market saw more availabilities, but this is partially due to tenants relocating to smaller footprints.
The uptick of only 0.7% in the vacancy rate is smaller than we initially anticipated. This could be due to New Hampshire being a more stable market than somewhere like Boston or New York City. The amount of employees in NH’s largest cities in are much smaller than other cities in the northeast, which rely heavily on public transportation.
Although the overall average vacancy slightly increased, the seacoast had a much larger shift. The Portsmouth submarket had almost a 5.0% rise in its vacancy rate, with the largest increase in the Class A market, by 7.2%. The majority of Class A availabilities that hit the market were located at Pease Tradeport, including a total of 26,000 SF at 273 Corporate Drive, about 30,000 SF at 100 Arboretum Drive, and 22,638 SF at the newly built 90 Arboretum Drive.
Even with this change in the submarket, the vacancy rate is still below the state’s average. This will likely change with 121,400 SF under construction in the Class A category in downtown Portsmouth.
The smaller Dover submarket also had a jump in its vacancy rate of 5.1%, mostly in the Class B category. This change is due to entire building at 100 Education Way in Dover becoming available after Cognia, which purchased Measured Progress in 2019, is in the process of downsizing its operations.
Outside the seacoast, most changes in vacancy were minimal and it will continue to take time to see impactful changes. Moving into the second quarter, as social guidelines change, we may see more companies bring employees back into the office or change their office plans.
At Colliers, we internally track over 23.56 million SF of office space across 6 submarkets. Our inventory includes buildings and condominiums 10,000+ SF and are classified as Class A, B, or C.
