Recent Market Trends in Suburban Office Parks in Northern New EnglandSeptember 21, 2021
As we head into fall, Partner John H. Sokul, Jr. shares a market trend involving suburban office parks in northern New England.
Covid’s impact to the office market remains in flux. Many predicted that there would be a flight to safety from downtown locations to suburban office parks for reasons related to avoidance of public transportation, ample parking, more space, fewer shared elevators, better outdoor amenities, etc.
While suburban office parks are strong inside Route 28/Boston, the opposite is happening in many parts of New Hampshire. Instead, in areas less connected to greater Boston, there is increased demand for new residential and less demand for office with more employees working from home. Residential remains red hot. Suburban office appears to be soft and contracting.
Some suburban office parks have seen a significant loss of value with the new owners buying “low” and repurposing vacant or largely vacancy office buildings into residential; self-storage; medical; and other non-traditional uses. There are exceptions to this trend, but these three examples are noteworthy:
Former Cigna building in Hooksett, NH.
The 97,200 sf former Cigna building located at 2 College Park Drive in Hooksett, NH (on approximately 35 acres) was sold in May of this year and is being converted into 81 market rate apartments.
The sales price was $2.5 million ($25.70 psf). The property is assessed at $8.1 million ($83.00 psf).
Former Lincoln Financial Buildings in Concord, NH.
The 96,000 sf and 114,000 sf former Lincoln Financial buildings located at One Granite Place (on approximately 180 acres) was also sold in May of this year and is also being converted into apartments.
The sales price was $3.4 million (16.20 psf). The property is assessed at $11,574,600 ($55.11 psf).
Former Liberty Mutual Building in Keene New Hampshire.
The 143,000 sf former Liberty Mutual Building located at 62 Maple Avenue in Keene, NH (on approximately 47 acres of land) was sold in May of this year and is being converted into a family medicine residency program and other related programmatic uses.
The sales price was $4.6 million (32.00 psf). The property is assessed at $9,895,700 ($70.00 psf).