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Office occupancy rate continues to rise, yet rents remain stagnant

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New Hampshire's office occupancy rates are still on the rise, ending the quarter at 92.1%. So far this year about 419,000 SF has been absorbed across all classes, or approximately 2% of the office SF we track. However, rents are stagnant, ending the quarter at $18.56 MG. Only the Salem submarket had a large shift in rents, with an increase of $1.28 PSF year-over-year. Even though the submarket had the largest drop in occupancy, by 3%, the rent increase can be attributed to new Class A space hitting the market this year. 

Over the quarter, a few companies consolidated multiple locations into one office. In the Manchester submarket, Drummond Woodsum is expanding its Manchester presence and consolidating some of its offices. The company is moving from a 4,260 SF downtown office space into 11,130 SF of millyard office space at 670 N Commercial Street.

Southern New Hampshire University was active again this quarter. On the seacoast, SNHU renewed its lease of 19,450 SF at 231 Corporate Drive in Portsmouth. In the Manchester millyard, SNHU reduced its footprint at 186 Granite Street, renewing in only 8,200 SF. Most of the company’s operations at Granite Street are moving down the street into the former Langer Mill, as renovations are completed, or into its other Manchester facilities. 

In the Portsmouth submarket, Stanley Security Solutions, Inc. is combining three of its offices into 12,600 SF at 75 Portsmouth Boulevard in Portsmouth. The company saw the city as a great fit due to its centralized location for customers and employees. 

Additionally, 75 Portsmouth Boulevard is welcoming Adult & Pediatric Dermatology. This is the first seacoast location for this New England-based company, opening in a 4,770 SF suite. 

Also during the quarter, 755 Banfield Street in Portsmouth reached full occupancy welcoming two new tenants. Capstone Mechanical, LLC moved down the street and expanded its footprint, leasing just over 5,700 SF. Casella Waste Systems moved its Saco, ME, office to Portsmouth and occupies about 5,100 SF. 

In addition to the lease activity, a few office investment sales occurred over the quarter. In the Manchester submarket, Wellington Business Park on Dartmouth Drive in Auburn, was purchased by CGI Real Estate Holdings for $3.5M ($57.11 PSF). This 61,290 SF two-building park was mostly occupied at the time of the sale and the new owner will move into the remaining space. 

In the Nashua submarket, Brady Sullivan sold its 36,706 SF building at 15 Trafalgar Square in Nashua to Shri Nilkanth, LLC, part of Northeast Medical Group from Lowell, MA. This multitenanted building was brought to the market with a 8.6% cap rate, but sold slightly under the asking price at $4.185M ($114.01 PSF).

In the Portsmouth submarket, the Kane Company purchased 111 Maplewood Avenue in Portsmouth for $9.065M ($446.40 PSF). The fact that this 20,307 SF building was 90% occupied was only part of the reason Kane made this purchase. Before purchasing the property, it went before the planning board to add a four-story, 74,000 SF office building to the site.  

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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