Study tracks recovery in Seacoast market
Signs of a recovery in the commercial office and industrial markets have emerged in the Seacoast, according to a study conducted by The Kane Company.
An analysis of the 2003 fourth quarter shows that office vacancy rates fell and rents increased in most area communities from the third quarter. Overall office space vacancy dropped by two percentage points, from 19.6 percent in the third quarter to 17.6 percent, according to Kane. The direct office vacancy rate (space offered directly by the landlord) fell from 15.4 percent to 13.8 percent, the company said.
According to the study, a recession-long decline in average asking rents for office space ended in the third quarter of 2003, with both overall and direct asking rents rising slightly during the fourth quarter in several of the Seacoast’s largest towns and cities. Average asking rents for all available space edged up slightly from $12.52 per square-foot in the third quarter to $12.61 per square-foot in the fourth quarter, while landlords increased average asking prices for direct space to $12.64 per square-foot in the fourth quarter from $12.59 the previous quarter.
The study also found that fourth-quarter gains in the Seacoast’s industrial markets were noticeable and modest, with overall vacancy falling by over one full percentage point — 11.5 percent in the third quarter to 10.2 percent in the fourth. While over half of all industrial vacancies was made up of space available for sublease, vacancy in available space offered directly by the landlord fell more than two percentage points, dropping from 6.3 percent in the third quarter to 4.2 percent in the fourth.
“These numbers clearly illustrate the level of activity we experienced during the second half of last year,” said Michael Kane, president of The Kane Company. “Office space has been reasonably priced and as a result, we are seeing a ‘flight to quality’ and a steady demand for first-class space. Industrial users are looking for less expensive space, which is harder to come by due to increased demand. We expect to see continued recovery throughout 2004.”
The company’s proprietary property database tracks nearly 30 million square feet of office and industrial space in southern New Hampshire, northern Massachusetts and southern Maine.