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The Vacancy Rate in the NH Office Market Continued to Rise, but Rents Began to Level Out

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The New Hampshire vacancy rate has steadily grown over the last two years with a more dramatic increase since the pandemic. Over the last year, the vacancy rate rose by 2.7% throughout the state, with the highest shift in the Concord submarket. Although this is one of the smaller submarkets we track, the vacancy rate rose by 8.1% year-over-year due to vacancies in two buildings - 97,200 SF being vacated at the end of 2020 by Cigna in Hooksett, and Lincoln Financial closing its operations in 114,000 SF in Concord. The vacancy rate in the Nashua submarket jumped by 3.1% due to Dell Technology leaving 198,000 SF in Nashua this quarter. 

On the seacoast, there is a slightly different narrative in the office market as some companies moved to the submarket and others expanded. F.H. Cann & Associates took 56,800 SF in Exeter, and companies like Sentient Decision Science, NECI, and Jordan Park Group expanded their footprints in the submarket. Even with these deals, there was a 2.8% increase in the vacancy rate. This is partially due to new buildings being completed and adding available space to the market. 

Although the vacancy rate has continued to rise all year, sale activity in the office market is starting to pick back up. The raw data shows that the sale price PSF is almost back to where it was before the pandemic. Class B average sale prices have slightly dipped in the past three years, due to some higher than average investment sales in 2019. The Class A market has seen the opposite trend as the PSF price has increased significantly from 2019. 

When looking more closely at office sale transactions from the first half of the year, many were not traditional sales. During the second quarter, Brady Sullivan purchased two vacant buildings in the Concord submarket for $25 to $31 PSF. One of the properties is now before the planning board for conversion to residential use. In the Manchester submarket, a downtown retail/office building with a high vacancy rate sold for $38 PSF. 

This quarter, more traditional sales occurred at an increased sale price PSF. In addition to an investor purchasing a fully leased building at $143 PSF in the Nashua submarket, two owner-occupiers purchased their buildings for roughly $95 to $125 PSF. These rates are more in line with what we saw before COVID, with the occasional outlier. Hopefully, this trend will continue and strengthen the office market. 

At Colliers, we internally track over 23.8 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 Q3

The Vacancy Rate in the NH Office Market Continued to Rise, but Rents Began to Level Out

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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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