Commercial Market Report - Upper Valley Region - 4th Quarter, 2008

By
Commercial Real Estate Agent with Lebanon Property Management, Inc

VOLUME ONE - Upper Valley Region - Commercial Market - 4th Quarter, 2008

It's that time of year where we tend to look backward rather than forward.  I intend to use this forum to keep others appraised of the commercial leasing activities in the New Hampshire side of the Upper Valley (defined as Lebanon, West Lebanon, and Hanover) on a quarterly basis.  I focus on this area as it is my area of expertise as well as the commercial and economic center of our region.  Please feel free to sign up for posts to this blog so that you can stay current on these market trends.

I focus on commercial leasing for office and retail uses, as these are my specialty.  I am pleased however to report to anyone interested in learning more about any other type of property or matter related to commercial real estate if you are interested and would like to contact me for any specific question or interest. 

Commercial - Office

  • Currently there are 14 properties (16 listings) available for lease
  • CLASS A office spaces are being listed from $15.00 - $18.00 per square foot
  • CLASS B office spaces are being listed from $12.00 - $14.00 per square foot
  • CLASS C office spaces are being listed from $8.00 - $10.00 per square foot
  • Many of the listings have been on the market for greater than 30 days

Commercial - Retail

  • Currently there are 6 properties available for lease
  • CLASS A retail spaces are being listed at $25.00 per square foot and ARE NOT leasing
  • CLASS B retail spaces are being listed at $10.00 - $14.00 per square foot
  • CLASS C retail spaces are being listed at $6.00 - $8.00 per square foot
  • Many of the listings have been on the market for greater than 60 days

In summary, the Upper Valley market has seen a slow down this past year - retail and office prices were soaring last year for CLASS A properties at over $20.00 per square foot NNN, as you have seen from the above, the office sector has already made the adjustment to a lower listing price however retail has held on to the higher asking prices - and is paying the penalty of vacancy - for it.  It is my professional opinion that the retail sector needs to adjust their asking prices similarly to the office sector to see their inventory move off the shelves.

In addition, I have seen a greater demand for smaller, private and executive suites (up to 800 square feet) and have had a much harder time renting larger spaces that do not have the ability to be subdivided.  Retail-use spaces have made marked movement into medical uses for private practices and in only those flexible use properties have I seen demand.  The consumer has a broader variety of spaces - and terms - to choose from now, as in residential, and are taking their time to select carefully.  The lending crunch hasn't completely crippled the commercial marketplace here as of yet anyway, but it has given way to a greater need for landlord-financed fit-up or other incentives to get the customer in the door.  My company, Lebanon Property Management has really begun to make a name for itself in this way because we deal directly with the tenant, can offer these great incentives & flexibility, AND have a crew available to do the actual construction.  This has streamlined our negotiation process & move-in timeline.

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