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The Office Market Remains Unsettled as Occupancy Rates Dip and Rents Rise

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New Hampshire’s office market remains unsettled as the State moves farther away from the initial pandemic related shut down. Many companies are waiting to make a decision regarding their future office plans and needs. Given the situation, it is not surprising that occupancy rates dipped year-over-year, ending the year at 90.5%.

Although the occupancy rate fell by 0.68%, rents rose by $0.28 PSF (a 1.5% jump), ending the year at $19.01 MG. The increase is not necessarily surprising considering the new space hitting the market is higher end space. The bump in rent will likely reverse and steadily decline if the market sees little or no absorption over the next year. 

Even with the daily media reminder that companies are readily adopting the “work from home” (WFH) business model, it remains to be seen what direction occupiers will truly take. While some people think the office market is retreating, particularly in cities, we believe the best way to describe it is – evolving. The pandemic pushed a lot of companies to a WFH platform. Some announced plans to potentially downsize their offices and stick with a WFH platform due to the investment in the technology and the ability to pull from wider employee pool. Others have announced a hybrid model, splitting time in the office and home, allowing office space to stay as is – at least for now. We have also heard about companies pulling out of a big city and into several spread out suburban locations to follow employee’s migration. These trends will have different impacts on the market, but we believe that the WFH approach will start to affect occupancy rates in 2021. 

While NH is in a wait-and-see phase, an immediate impact was seen with the occupancy rate slightly dropping as some companies vacated space. However, the impact was not as significant in 2020 as we believed it would be. In 2021, some companies will undoubtedly downsize or close NH locations, while others may expand to follow social distancing guidelines. As more companies make office decisions, we believe this will lead to lower occupancy rates in the 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.   

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The Office Market Remains Unsettled as Occupancy Rates Dip and Rents Rise

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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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