Report: Southern N.H. retail on the rebound
Southern New Hampshire 'turned a critical corner' during the period, with a total retail vacancy rate dropping from 11.4 percent to 9.5 percent
More of southern New Hampshire's mid-range retail spaces are finding tenants, but so far that lowered vacancy rate hasn't trickled down to the region's smallest empty stores.
That's according to a new retail report, released by Keypoint Retail Partners LLC, a Burlington, Mass.-based commercial real estate firm, which found that total vacant retail space declined by 15 percent in southern New Hampshire from last May to this May.
Southern New Hampshire 'turned a critical corner' during the period, with a total retail vacancy rate dropping from 11.4 percent to 9.5 percent, according to the annual report, which analyzed changes in retail activity in 39 cities and towns in the southern part of the state between May 2010 and 2011.
This came on the heels of two 'punishing' years in which total vacancy in the region had swelled by 57 percent, it said.
"Southern New Hampshire had been adversely impacted by a slew of big-box vacancies during the past two years," the report reads, "but has rebounded due to general improvement in the economy and positive sales trends from scores of retailers."
Over the study period, total retail supply increased by 366,000 square feet -- or 1.3 percent -- to 28.9 million square feet, which it largely attributed to the construction of Lowe's and a Market Basket in Salem.
Unoccupied space concurrently declined by 498,000 square feet, meaning the region experienced a net absorption of 864,000 square feet -- its first positive absorption rate since 2007, according to the report.
The only retail segment that did not lower its vacancy rate during this period were stores of less than 5,000 square feet. These smaller retailers -- particularly independent mom and pops -- continued to struggle, seeing an increase in vacancy of 46,300 square feet, or 3.8 percent.
But aside from the smallest of retailers, all other segments saw an improvement in vacancy rates.
The greatest improvement came for stores in the 100,000 to 199,999 square-foot range, which went from 5.2 percent vacancy to full occupancy, thanks to the new Dick's Sporting Goods at the Pheasant Lane Mall in Nashua and the forthcoming Lord & Taylor at The Mall at Rockingham Park in Salem.
Of mid-range stores, improvement varied: the 10,000 to 24,999 square-foot bracket fell from 13.6 percent to 10.7 percent; the 25,000 to 49,999 square-foot bracket dipped from 13 percent to 9.9 percent; and the 50,000-99,999 square foot bracket from 8.2 percent to 7.4 percent.
Of all the towns included in the report, Merrimack had the highest vacancy rate, 18.3 percent, largely attributed to the Shaw's Plaza on the Daniel Webster Highway, which comprises 44 percent of the town's vacancy. Plaistow had the second-highest vacancy at 15 percent and Manchester was third with 13.1 percent.
Towns with the lowest vacancy rates were Bedford, at 3.1 percent, Londonderry, at 5.1 percent, and Amherst, at 5.3 percent.
With its acquisitions of Ocean Bank and River Bank, People's United Bank led the way in new store count with 14, while Great Clips trailed behind with the addition of three new stores. Meanwhile, Blockbuster Video closed four stores and Curves for Women and Quizno's Subs closed three stores each.
Even though the region showed a 'vast improvement' during the past year, the report warns that the trend is not guaranteed to continue into the future.
"The economy has exhibited a recent stall, spreading an uncertain cloud over the retail outlook for the balance of the year," according to the report.
To view a copy of the report, visit keypoint.partners.com.