New Hampshire's Increasing Appeal to Industrial/Flex Occupiers

Over the last few years, the greater Boston commercial real estate market has experienced multiple transitions. However, even with reduced headcount in some offices and a glut of unfilled lab space, there’s little doubt that plenty of companies desire the downtown environment for its proximity to talent and attractions, along with stronger value in Class A trophy buildings.

However, it’s also become evident that southern New Hampshire represents a surging market with yet untapped potential, owing to its mix of affordable space and technical talent. For industrial and flex occupiers, exploring opportunities just over the border in the suburbs north of Boston has shown to be a fruitful expedition, with ample land and properties available, along with affordable labor ideally suited for assembly and production-heavy industries.

Will southern New Hampshire continue to attract firms looking for technical talent and lower real estate costs? All signs point to yes.

Balancing the Realities of Relocation

For property owners and developers, New Hampshire real estate offers the ideal mix of costs savings and opportunity. While Boston area industrial properties remain few and far between - not to mention more expensive to operate - heading to the Granite State has been a boon for firms like RJ Kelly and Rhino Capital. Recent deals include a $90 million purchase of 14 industrial properties in Southern New Hampshire by RJ Kelly, and 13 Page Road in Londonderry, NH by Rhino Capital.

More notably, Nongfu Spring, a massive Chinese beverage company, purchased a building in Nashua's Westwood Park earlier this year. While the deal raised eyebrows for a variety of reasons, it also showcased the growing international appeal of New Hampshire’s affordable industrial ecosystem and workforce resources.

Of course, even with the increased eyeballs on New Hampshire’s available flex and industrial properties, there are limits to its popularity. For complex cleanrooms and laboratory environments, the cost to pack up and move to a marginally more affordable space just over the border likely doesn’t (yet) yield sufficient savings to justify the hassle of building a suitable lab or manufacturing setup in a new facility - and landlords know this. If a company does choose to relocate, it will likely head out of the market entirely to southern states with significantly lower operational costs. Recent decisions by manufacturing companies like AirBorn and Cold Chain Technologies LLC to shutter local facilities show that Massachusetts is not immune to losing viable manufacturers if economic pressures mount.

However, for occupiers that are finding the cost per square foot too high or technical talent too hard to find and that wish to stay local, heading north could be a viable option. For more information on local real estate trends and market dynamics, be sure to check out Cresa’s most recent market insight reports here.