Vacancies abound in Nashua area office market

More than 22 percent of the space in Nashua’s rental office buildings – mostly bundled in south Nashua on Spit Brook Road, downtown and on Amherst Street near the F.E. Everett Turnpike – is vacant.

That’s nearly twice Manchester’s office vacancy rate of 11.9 percent and more than double the national average of 9.7 percent, according to new statistics from Cushman & Wakefield, a global commercial real-estate company.

“Nashua is probably the toughest office market in terms of vacancy,” said Chris Tremblay, director of property management for the Boston office of commercial real-estate firm Aegean Capital, which also serves New Hampshire.

In fact, Nashua’s 22.1 percent office vacancy rate – which refers to rentals, not owner-operated buildings – is the worst in southern New Hampshire, according to Cushman & Wakefield’s market report for the last three months of 2007.

Things are predicted to stay that way for some time.

All that may seem surprising considering Nashua’s reputation as the state’s high-tech-industry hub. But Nashua is a small market, so even one building vacancy can have a big impact on the numbers.

All told, Nashua had a net loss of 200,000 square feet of office-space occupancy in 2007. Manchester, which has more office space at about 3.8 million square feet, lost only 50,000.

According to Jim DeStefano, of Bedford’s Grubb & Ellis Coldstream Real Estate Advisors, Nashua’s office market has been affected to some extent by what’s happening on the residential side.

In greater Nashua, residential values have dropped for the last two years and homes are staying on the market longer. Although this area has escaped the worst of the subprime mortgage crisis, Hillsborough County’s 2007 foreclosure rate was double that of 2006.

DeStefano said businesses such as mortgage and title companies simply aren’t looking for space right now.

Thomas Farrelly, executive director for Cushman & Wakefield’s New Hampshire office, said the local market is affected by what’s going on south of us right now – particularly, all the vacancies along Route 3 in Massachusetts.