Real Estate Q&A
Inside the commercial market
Overall, how would you characterize the health and the short-term future of the local commercial real estate market?
Michelle Lange: Yes, most definitely there has been improvement in the local commercial market in 2013. Business confidence was up. I am optimistic the commercial market will continue to show signs of improvement in 2014. Respected industry leaders paint a positive outlook for the commercial market in general across the country saying if business confidence continues and the housing market improves, it will help the commercial real estate market in 2014. I am hopeful the Peterborough commercial real estate market will benefit from these influences.
Andy Peterson: Spotty but recovering.
What are some of the biggest challenges facing the local commercial market?
Lange: Having patience and flexibility. Sellers and landlords understand it’s taking time for our local commercial market to recover from the recession. They also have learned to be flexible with meeting the needs of the consumer if they want to make a deal.
Peterson: Confidence in the future and availability of trained employees.
Would you say the commercial sale/leasing market favors buyers or sellers?
Lange: Each side faces its own set of challenges. Both have a budget, investment goals and bottom line to work with.
Peterson: It is still generally a buyer’s market in commercial real estate. However, some interesting opportunities in investment properties are likely to be absorbed by purchasers this winter ushering in an improved outlook for later 2014 and beyond.
What types of commercial spaces are moving? (office, manufacturing, warehouse, etc.) What types are having a harder time attracting interest? And why?
Lange: In 2013, I have had the opportunity to work with a variety of businesses in the private and public sector. In 2013, two retail shopping centers sold in Peterborough. I worked on various office lease transactions and at the end of the year, found revived interest in commercial land properties I represent for sale.
Peterson: Office, manufacturing and warehouse properties are traditionally a long term hold investment which are therefore available for profitable disposition when the business need arises. Retail properties, however, are attracting more immediate interest from national real estate investment trusts and individual investors. Development projects are largely driven by likely tenant interest.
Are you seeing much interest from large companies looking to move here, or is the market increasingly dominated by smaller and mid-sized companies?
Lange: Attracting buyers and tenants with a need for large square footage of manufacturing, warehouse and office space has been a challenge in 2013.
Peterson: We see interest from both.
Have sale or rental prices for commercial property dropped at the same rate as residential homes in recent years? How do you see the commercial prices changing over the next year?
Lange: Residential home prices for sale and lease and commercial real estate prices for sale and lease are not linked. To determine a sale and/or lease listing price in commercial real estate one has to research comparables of closed or leased commercial properties. Where it is linked is when housing sales volume increases, it helps the commercial real estate market.
Peterson: Yes. As with residential real estate regionally, we feel strongly that purchases made today will look very attractive indeed in the years ahead.
Are you seeing much interest from companies looking to move to the Monadnock region? If so, from where are they moving?
Lange: I work with companies in New Hampshire who are expanding and national companies looking to establish themselves in our area.
Peterson: The private economy in New England is healing itself through the application of risk capital investment and a marked infusion of young entrepreneurial energy from a new generation seeking to build businesses responsive to the changing 21st century marketplace. Computer service providers, green energy companies, whole and specialty food purveyors, health and wellness consultants, medical device manufacturers are among those companies that, like many publishing firms in years past, are drawn to locate in the Monadnock region to share in our appealing overall quality of life. It is still a truism that the number one reason that companies choose to relocate to our area is because the boss wants to live here. Thus “quality of life” for us is really the horse (not the cart) of economic development. People, as you can imagine, come from near and far — as there are few better places to be!
Which towns have the most active commercial market, and which towns are seeing less activity than expected?
Lange: The marketing my listings receive on the web allow for equal exposure. I find it doesn’t affect whether the property is in Peterborough or a smaller town such as Bennington.
Peterson: Rural towns, like urban centers, need to take a proactive role in continually rejuvenating their employment base, attracting new industries and promoting a welcoming and constructive attitude responsive to the needs of business. This is necessary not only for employment growth, but in order to maintain existing employment levels as businesses change and in some cases inevitability recede from the local landscape.
The local towns that understand this critical need are particularly important to all citizens of the Monadnock region, as we are not well-poised demographically to thrive as simply bedroom communities and require local employers offering good living wage jobs to maintain our quality of life. This “quality of life” is itself distinguished by the fact that so many are people able to both live and make their living here. Chief among these local employment hubs are the towns of Jaffrey and Rindge to the south, Bennington and Hillsborough to the north and Peterborough in the center, with significant contributions from other regional towns as well.
In terms of relative attractiveness, the best places to live in our region are also the best places to invest and to do business. Good schools, recreational amenities, quality health care, arts/entertainment and dining venues, availability of consumer goods, municipal utilities and high speed internet access are earmarks of successful communities today. So too are communities with these attributes the most sought after for commercial investment.