NORTHEAST SNAPSHOT, APRIL 2006
New Hampshire Office Market
The Southern New Hampshire office market currently is not seeing any activity along the lines of new construction. However, the past few years have seen a large increase in office supply in conjunction with the redevelopment of the Manchester Mill Yards. Until the downtown and suburban vacancy rates stabilize, new supply probably will not be added to the mix. Currently, the vacancy rates are floating between 15 percent and 20 percent, leaning more toward the higher end. In downtown Manchester, New Hampshire, rental rates range from $15 per square foot to $21 per square foot full gross for Class A office space. In surrounding communities, tenants should expect rental rates of approximately 10 percent to 20 percent less. In addition, for Class B office space, which exists mostly in the form of converted mills, rental rates range from $12 per square foot to $14 per square foot full gross.
Small developments such as the new off ramp at Kilton Road in Bedford, New Hampshire, has mitigated rush hour traffic on Route 101 and created convenient access to a number of office and retail locations in the stretch along South River Road. Larger developments such as the recently completed Manchester Fisher Cats’ stadium downtown near the river has spurred construction of a new hotel that is opening presently, and to the south of the ballpark, new condominium units will bring additional residential supply to the downtown Manchester market. Further, new northbound exits on Route 293 at the same location will help traffic flow through the city.
In general, smaller tenants are shifting leases from one building to the next, but no substantial movement of large scale office users has occurred in the New Hampshire office market recently. In the future, the Merrimack, New Hampshire, submarket appears to be primed for ancillary development. When the airport access road is complete in approximately 3 to 5 years, it will bring traffic from the Everett Turnpike onto Route 3 and effectively over to the airport, opening an avenue to an otherwise landlocked area of the state.
— Chris Norwood is a vice president with NAI Norwood Group in Bedford, New Hampshire.
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