NORTHEAST SNAPSHOT, NOVEMBER 2008

New Hampshire Retail Market

Fini

New Hampshire has the lowest unemployment rate in New England, the lowest tax burden and a highly educated work force — all of which continue to attract hi-tech, finance, medical and other employers to the state. Multiple New Hampshire cities and towns have been named the “Best Places to Live in America.” As with much of the rest of the country, though, speculative development has slowed significantly. Most developers are moving forward only with a tenant in hand, and prices have modified substantially in the past 6 months, as fewer developers are chasing deals.

This new retail paradigm can be seen in the Nashua Landing project in the state’s southern corridor. Nashua Landing has been fully approved for a 600,000-square-foot lifestyle center. The developer, WS Development, in association with New England and Packard Development, has placed the plans on hold for approximately a year to firm up commitments from the anchor tenants.

The southern corridor remains active, though, with two other big projects in the pipeline. The same developers of Nashua Landing are also planning a 140,000-square-foot lifestyle addition to an existing Macy’s-anchored retail site in Bedford. The total project will encompass approximately 330,000 square feet of specialty shops, restaurants, a department store and a Whole Foods Market. In Merrimack, the largest outlet center in the state has just received conditional approval for 608,916 square feet of retail development. The plan calls for 135 outlet stores, four restaurant pad sites and a hotel. Chelsea Property Group, a Simon company, is developing the site.

As evidenced by these three new projects, the majority of development continues to come out of the southern tier of the state, which is still considered the northern suburbs of Boston. This part of the state is a densely populated, high income area attracting continual development.

However, the Tilton/Lakes Region of New Hampshire has recently experienced unusually strong growth. Retailers such as The Home Depot, Wal-Mart, Lowe’s Home Improvement Warehouse, BJ’s Wholesale Club, Kohl’s, Staples and others have recently located to this small tertiary market, and other big-box retailers are attempting to find locations within this market. This kind of activity is expected to continue as more people become full-time residents in what was once considered a vacation destination.

Despite the softening market, New Hampshire has not experienced significant retail vacancies, however, many are pending. Linens n Things, Movie Gallery and a few other retailers will be closing their stores. Overall, the retail market is experiencing a respectable 5 percent vacancy rate.

Looking toward the future, the performance zone in Bedford is rapidly developing as a result of its proximity to the Manchester/Boston Regional Airport. A new access road leading directly from the highway through the corridor to the airport is currently under construction. The residents of Bedford have the highest per capita income in the state and are ideal retail targets.

— Tom Fini is the president of Bedford, New Hampshire-based Sperry Van Ness / Fini Group.

©2008 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.