Even though we are still in the pandemic, the New Hampshire commercial real estate market is beginning to show a clearer direction. Companies in the office sector are still facing some uncertainties as they try to make decisions on their office needs - will they need less space or decide to consolidate locations if they stay with a work-from-home platform, will they need to expand to adhere to social distances guidelines, etc.
The occupancy rate in the office market dropped by 0.7% year-over-year for the second quarter in a row, ending the quarter at 91.2%. This translated to a negative absorption of 314,474 SF. Given the current climate, this does not come as a big surprise, but a larger shift may still come as more companies reconfigure their office space.
Despite occupancy rates dropping, rents actually rose by 3.01% or $0.57 PSF year-over-year, ending the quarter at $18.89 modified gross. As more space becomes available, rents will likely level out or start declining.
Although the office market is facing some challenges, this quarter did mark the completion of another new office building this year. The Class A, 72,000 SF timber frame building at 90 Arboretum Drive in Newington is up and ready for interior finishes. Wheelabrator Technologies signed a lease for two of the three floors, but will not occupy the building until the beginning of next year.
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.