The New Hampshire office market is heading into uncertain times as we wait to see how companies reevaluate their office needs. The affect of the pandemic could take a year or longer to see an impact on occupancy rates, but there will likely be a spike in sublease space hitting the market.
During the second quarter, the overall occupancy rate was flat, with a drop of 0.68% year-over-year. Even with this dip, rents were relatively flat with a $0.02 PSF, or 0.1%, increase year-over-year.
Across the state, Class B space has the highest occupancy rate of 91.97% and also the largest rental rate decrease, dropping by 1.07% year-over-year. Despite the drop, the high occupancy rate still resulted in an increase in rents by $0.87 PSF, or 5.07%.
As NH moves forward through the pandemic, much is unknown of the long-term impact this will have on commercial real estate. More employees are back to work, but many have continued with the work-from-home platform - some until the end of the year and others saying this move will continue indefinitely. Companies may also need more space per employee to account for social distancing and COVID recommendations. As companies wait to make decisions, it is hard to predict what changes they will implement and how that will affect their footprint.
We will need to distance ourselves further from the pandemic to fully understand the lasting impact it will have on the commercial real estate market.
At Colliers International in New Hampshire & Maine, we internally track over 23.07 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.