Commercial Real Estate Trends in New Hampshire – Helpful Hints Can be Found in Unlikely Places

Headshot - John Weaver
John F. Weaver
Director, Corporate Department and Chair, Real Estate Practice Group and Chair, Artificial Intelligence Practice
Published: Business NH Magazine
October 29, 2012

Anyone trying to make a decision about commercial real estate in the last three years must have felt like they were looking for signs at a craps table: lots of numbers, but none that could predict reliable trends. Depending on the business organization, realtor, or economist, no two sets of data seemed to say the same thing. If one real estate broker thought commercial rents were increasing, a study demonstrated that demand had evaporated and asking rents were falling. Although a lawyer  can protect their clients from established risks – injuries on the property, disputes over maintenance, change in space needs, etc. – there is little we can do for a lessor who rents at $12.50 per square foot one month before the asking price increases to $13.50, or for a lessee who rents at $13.50 per square foot one month before the asking prices drops to $12.50.

Advice from lawyers and brokers aside, it is always smart to do your own research into broad trends when considering real estate opportunities. The last four years have been incredibly disruptive to business trends, including tenancy rates and real estate prices, for both sales and leases. However, there are sources available that can be used to supplement the advice of brokers and attorneys, which can permit you to have an educated opinion when consulting with them. This will help you to make a decision about filling your real estate needs with more confidence.

You can start with LoopNet’s Market Trends pages (, which provides commercial real estate statistics dating to 2006 for several southern New Hampshire metro areas (Manchester, Nashua, and Portsmouth) – including sale prices and rents. Similarly, CBRE New England publishes an annual New Hampshire commercial real estate outlook, that provides a review, albeit an overtly optimistic one, town-by-town of the I-93 corridor and seacoast areas.

However, other data beyond real estate availability and pricing should also be considered, including labor trends, bankruptcies, and consumer information. The Federal Reserve of Boston publishes a monthly economic summary for New Hampshire, which lists data regarding income, housing permits, exports, etc. The Federal Bureau of Labor Statistics updates New Hampshire labor data each month as well at

Even seemingly disconnected data provide indicators as to where commercial real estate will be of value in the coming years. For example, the Center for Disease Control conducts an ongoing study to determine how many Americans, state-by-state, are giving up land line phones to rely solely on cellular phones (the CDC began this study nearly ten years ago because it worried the shift to cell phones was hurting the effectiveness of its surveys, which are conducted by land line phone). The study reports that between 2007 and 2010 (the most recent data), the number of New Hampshire residents who rely only on wireless phones more than doubled. This indicates two things: one, the price of homes in areas with poor cell reception will have to adjust to reflect insufficient communications infrastructure for purchasers’ needs; and two, businesses that respond to this trend will leave areas with poor cell reception, either because customers are increasingly out of these areas or because the businesses themselves are following the trend away from land line communication. If this seems too disconnected from the movement of real estate prices, think of wireless communications as a form of infrastructure akin to roads. Businesses that thrived when a well-used town road passed by their properties frequently had to either close their doors or relocate their premises if most travelers moved from the town road to the state highway. Today, businesses that are not served by wireless technology may be in the same position as those enterprises that had to physically move to follow customers to the highway.

The sources listed above provide a careful reviewer with ample opportunity to gain insight into coming real estate trends, but also for overly enthusiastic readers to push their luck. Case in point: The Federal Bureau of Labor Statistics reports that leisure and hospitality employment are at ten-year highs in New Hampshire; the Federal Reserve of Boston indicates that housing permits in the Manchester-Nashua area are up by 25% from this time last year; and LoopNet shows that despite a brief rebound last year, retail rents have continued to decline through 2012. A restaurant tenant considering a move into Nashua may look at this information and conclude that tying up space in Nashua now makes sense due to the clear growth in New Hampshire’s leisure/hospitality field combined with Nashua’s expected population growth, low retail rents, and fairly reliable cell phone reception. However, another restaurant tenant looking at the same space may decide that, in light of the continuing slump in Nashua’s retail segment – reflected in its rents – and the spotty cell coverage in that particular area, leasing there is too uncertain right now.

What is important, though, is that you have done your homework and have an understanding of both the current real estate market and also the forces that affect it. Consulting with a broker or attorney can help you to refine your opinions and information, but there is no substitute for doing the research yourself. Doing that will also permit you to do a better job identifying potential risks that an attorney can incorporate into your lease or purchase and sale agreement. To return to the first paragraph, although it is unlikely that a lease would permit a month-to-month rent adjustment so quickly after commencement, an astute attorney would recognize the potential for volatile rent swings and incorporate a mechanism to adjust the rent at certain intervals. By doing that, the attorney protects you from risk and limits your gambling. You can help by knowing the data surrounding your real estate.