Why numbers don’t tell the whole real estate story in N.H.

The investment real estate world is rife with statistics, and I want to dedicate some space to looking at where they come from, and what they mean for us in New Hampshire.

There are essentially two components to these statistics. First, they relate to a particular market area, and second, they are based on certain transaction criteria.

The United States is broken down by the Census Bureau into metropolitan statistical areas, or MSAs. The Boston-Cambridge-Quincy, MA-NH MSA is the 11th largest in the country, and includes Rockingham and Strafford counties, but no others in New Hampshire. The Manchester-Nashua MSA is ranked 121st. (Sometimes both of these MSAs, along with a few others, are combined into what is called the Boston-Worcester-Manchester combined statistical area, or CSA. This CSA is in 5th place among nationwide CSAs.)

Another ranking that is often used is primary, secondary and tertiary markets. In general, the top 50 or so MSAs are primary markets, the next 50 are secondary markets, and the rest are tertiary markets. Most of the reports that are generated by firms that gather statistical data on investment real estate transactions categorize them by these classifications. For the most part, New Hampshire is a tertiary market, although it could be argued that southern New Hampshire, when viewed as an extension of Boston, is a secondary market. (We won’t even get into what are considered to be New Hampshire’s submarkets.)

The other component of the statistical data is the transaction criteria. Most of the reporting firms have a fairly high threshold in terms of transaction dollar value. Real Capital Analytics reports only on transactions having a value of $5 million or more, either as a single property or a portfolio.

I recently sold a retail plaza on Manchester’s West side for $2,335,000; this won’t show up in the Real Capital database, but is a fairly significant transaction in our market. In general, the large commercial real estate firms, ours included, have reporting criteria that leave out some of the smaller transactions in the market. (Our firm reports on properties of 10,000 square feet or more.)

The point is we need to be careful about applying national statistics to what is happening in New Hampshire. While there have been parts of the country where retail properties have been selling at a 6.5 percent CAP rate, that number is probably reflective of an investment-grade shopping center in a primary market, rather than a privately held neighborhood center in a tertiary market.

In the end, local market intelligence is critical to assess the data and determines its relevance to local properties, and a seasoned investment real estate adviser is the best source for that intelligence.


A couple of news blurbs caught my eye recently. One had to do with going-out-of-business sales by tenants in retail plazas. Generally, leases for these businesses are very restrictive as to signs, but bankruptcy courts are more lenient, and have the right to set aside lease provisions that interfere with the ability of the tenant to sell off inventory and provide funds for creditors. Landlords don’t want such signs to become a banner of failure for an otherwise healthy shopping center, and are becoming more aggressive in trying to enforce their lease provisions in the bankruptcy courts.

Another blurb reminded me that there is always something new on the horizon. Advertising has proliferated these days, and I fear that pro baseball uniforms will someday become like NASCAR racer uniforms. But the latest in the retail world is parking stripes. These are apparently strips of vinyl that are used as the parking space divider lines, and they contain printed messages from stores in the mall (or even TV shows like “Desperate Housewives”). The idea is that consumers are there to shop in the first place, so the stores in the mall tap into that predisposition. Apparently, some view this as a win-win-win for the mall (additional revenue), the shopper and the advertiser. Haven’t seen one yet, but I’m looking!


Candia is a tertiary market if there ever was one, despite being just two towns east of Manchester on Route 101. There has been a fair amount of development going on in town lately. There is a new project being built at Exit 3, the “Gateway to Candia,” that includes a gas station, Dunkin’ Donuts and a car wash. There will also be some multi-use industrial condos built on land behind them. A new water park is being built on Route 27, and the local district court will be moving from Auburn to Candia into a brand new 8,000-square-foot building currently under construction.

But the most interesting activity is the town’s own search for a grocery store. The town owns about 12 acres at Exit 3, and has determined that what the town needs is a grocery store, so it has issued a request for proposals and actually gone out and contacted several supermarket chains to invite them to town. My sense is that one of these chains would have come to town already if the demographics supported it, but I have to give the town credit for its approach. We’ll be monitoring the outcome of this effort.


The New Hampshire Supreme Court has decided that a municipality can ban electronic billboards for aesthetic or safety reasons. This was a case dealing with Carlson Chrysler in Concord. Many towns have ordinances restricting or banning electronic signs, and it will be interesting to see what direction this issue will take in various towns following this decision.

Dan Scanlon is a retail investment adviser with Grubb & Ellis|Coldstream Real Estate Advisors Inc., Bedford. He can be reached at 603-206-9605, or dscanlon@coldstreamre.com.