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Office occupancy rate continues to rise, yet rents remain stagnant

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New Hampshire’s office occupancy rate rose by 2.3% year-over-year, ending the quarter at 92.1%. Although occupancy continues to rise, rents remained stagnant year-over-year, ending the quarter at $18.41 modified gross.

Over the past quarter, we saw an increase in investment sales throughout the markets we track. In the Concord submarket, with occupancy reaching 93.7%, it is no surprise that investors are eyeing the area. A local investor, JP Irving LLC, purchased 6 Loudon Lane in Concord for $5.6M ($85.47 PSF). The 65,520 SF Class B office building was brought to market with an estimated 9% cap rate and occupancy at 89% with Bankers Life, Graphon, Absolute Title LLC, and ROC USA as tenants. 

Moving to the Manchester submarket, which also had a jump in occupancy rate by just under 4%, a local investment group purchased Cedarwood Park in Bedford. This 28,900 SF Class B multitenanted building was about 94% occupied when it sold for $2.6M ($89.97 PSF) to Roxo Realty.

In the Dover submarket, the office building at 36 Industrial Way in Rochester sold for $1.9M ($30.41 PSF) to a MA-based investment group, Madbury Capital. This 62,470 SF Class B building was about 57% occupied at the time of the sale. 

In addition to the investment sales, the office market saw existing tenants expand and welcomed new tenants. In the Manchester submarket, the Sundial Center in Manchester welcomed AmeriHealth Caritas. The company is opening its NH headquarters after signing a 5-year contract with the NH Department of Health and Human Services. AmeriHealth will fully occupy its 22,000 SF space by September with the company’s senior leadership, medical affairs, finance, and provider network management teams. 

Mainstay Technologies renewed and expanded its footprint in the Sundial Center, now occupying a total of 10,000 SF. Mainstay originally leased 3,000 SF back in 2016 and then doubled its space in 2018. This additional expansion was prompted by the company’s 30% growth over the last few years. 

Also in Manchester, 8025 South Willow Street welcomed two new tenants moving from Londonderry. Travel & Transport Inc. expanded into 3,035 SF and Industrial Marine Electronics moved into 2,000 SF. 

Pegasystems Inc, a global leader in digital transformation systems and software, will be relocating its NH offices from the Manchester submarket to Salem. With its expansion into 33,000 SF at 1 Northeastern Boulevard, Pegasystems also plans to bring some of its operations from its global headquarters in Cambridge, MA, to its new NH location.

The Nashua submarket also saw a tenant take additional space at 25 Manchester Street in Merrimack by subleasing 27,045 SF. This is the company’s second sublease at the building this year bringing the building’s occupancy to 89% and absorbing about 43,000 SF in the submarket.

Over on the Seacoast, with an occupancy rate over 95%, it is no surprise that some companies are committing to space that will not start construction until 2020. It was recently announced that HubSpot has committed to anchoring the McIntyre Federal Building. The building is undergoing major renovations and will house office, retail, and residential tenants. HubSpot will occupy the majority of the office space. The company opened its first Portsmouth location back in 2015, and since then the company has grown by over 600%. 

At Colliers International | New Hampshire, we internally track over 20.8 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.   

Office Market Review

Office occupancy rate continues to rise, yet rents remain stagnant

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Kristie Russell

Research Manager | New Hampshire & Maine

Manchester, NH

As the Research Manager, I serve as the point person for gathering and reporting on market knowledge for the New Hampshire and Maine offices. 

I collaborate with our brokers to deliver in-depth analyses of current market conditions and trends for their clients. Using various in-house and online resources, I maintain our proprietary database, which includes detailed property statistics, sale and lease comparables, market contacts, and tenant activity within New Hampshire and Maine. 

With this data, I develop best-in-class research reports, market analyses, and market insight to ensure our clients capitalize on this research as they contemplate business decisions that significantly affect their bottom line.

Prior to becoming the Research Manager, I was a Marketing Specialist at Colliers for five years. In this position I used Adobe software, including InDesign and Photoshop, to implement marketing strategies in support of our brokers. 

My responsibilities included creating property marketing collateral - such as flyers, brochures, ads, and proposals - as well as maintaining listing databases and our exclusive listing inventory. In addition to the property marketing, I assisted in coordinating special events, handling public relations and advertising, creating brand awareness, and developing our SEO and social media campaigns. 

Additionally, I am a licensed real estate salesperson in New Hampshire.

Prior to beginning my career in commercial real estate, I worked for Gallery Marketing Communications, LLC as a graphic design artist. During my time there, I used Adobe software to design brochures, flyers, business cards, and postcards, among other marketing materials. I also worked for Gatehouse Media, Inc as a freelance sports journalist, covering high school games in Massachusetts.

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