Summer has come and gone and it seems like it was going fast. We recorded the wettest June and July here in the northeast, while our friends in the west experience record droughts, heat and forest fires. With COVID-19 on the rise again thanks to the Delta variant, it’s just as crazy now, if not even crazier. With back-to-school masking policies varying widely between states, counties, and cities, and troop withdrawal from Afghanistan, the political divide across the country seems to have peaked.
While I am usually relatively optimistic about my forecast for the coming sunny days, the optimism of spring has quickly waned, even at the earlier peak of COVID-19. We noticed a decline in new business interest, fewer inquiries about properties and more companies (national, regional and local) that say “no” to new or additional locations. Retail sales in July were down year-over-year, however, according to NAR, retail property acquisitions increased 155% year-over-year, mainly due to retail concerns in July 2020.
Despite the cons, New Hampshire’s economy is strong and has done well throughout this saga. The stock market continues to make new highs every week, and as the number of people vaccinated increases, restaurants and retailers will see more traffic. New Hampshire has some of the lowest unemployment rates, and yet businesses from factories to fast food cannot find enough help to meet current demand, let alone grow. Who would have imagined 1.5 years ago that Dunkin Donuts would close at 2:00 p.m.?
We see a similar development in industrial and multi-family properties as in the housing market – a low supply leads to several offers. It’s rare to see a small industrial building with a truck dock for sale in southern New Hampshire. The acquisitions of large multi-family residential complexes (gardens or low-rise buildings) rose by 68% in the first half of 2021. Even so, the shortage of labor housing remains a major problem that needs to be addressed.
The main markets in southern New Hampshire are still the border towns of Nashua and Salem:
In Salem, the redesign of the former Rockingham Park circuit has attracted national and regional retailers alike. It continues to generate interest from retailers, service providers, restaurants, and other entertainment venues.
Many new tenants have opened or are under construction in Nashua: Lucky Casino has opened at Exit 6 on the long-empty Bugaboo Creek; Buchika’s bike has Daniel Webster Hwy at 166. opened; BJs is building a new gas station on Daniel Webster Hwy. next to CVS; Crumbl Cookies was opened in Webster Sq. and on the other side of the parking lot, a 42,000 square meter new supermarket concept (supposedly an Amazon store) is being built. One block south of Webster Sq. the Patel Brothers supermarket opens in 72,000 s / f (formerly JCPenney Home Store) next to the NH Liquor Store.
Outside of these markets, several new restaurants have surprisingly appeared: The Flight Center has opened a second location in Manchester on the site of the former British Beer Pub on South Willow St.; The poke spot opened at The Shoppes at South Willow; Jersey Mike’s opens to Rte. 125, at the former Friendly’s in Manchester and most recently at the Appletree Shopping Center in Londonderry. In Hudson, the new retail project on Lowell Rd. Has added three new tenants – Boss Blow Dry Bar, Bellacure Nails and Hudson Brews. On the other side of Hudson on the Rte. 102, Fetch a Pet and East Coast Muscle recently opened. In Bedford there is a new plan for the Market & Main project, Tuckers will soon open in the former Outback Steakhouse and Pressed Cafe is taking over the former Canoe restaurant, although no construction was seen on a recent drive by.
With all of this activity in the first half of the year and a slowdown in the summer (a notoriously slow period for commercial real estate), it seems like things are coming to a standstill. However, I believe that retail is on solid ground in southern New Hampshire and I predict we will see an increase in activity after the summer.
Andrew Levy, CCIM, is Senior Manager of Retail at Berkshire Hathaway HomeServices Verani Realty’s Commercial Division, Londonderry, NH