New Hampshire Commercial Real Estate Market Trends Analysis

Industrial buildings are a category of commercial real estate that is used by businesses that serve other companies (B2B tenants). B2B companies either manufacture or deliver goods to other manufacturers or retailers.

The exception is the rapidly expanding world of fulfillment centers that hold and deliver products sold by online sales platforms directly to their consumers.

The holders of industrial properties are also long-term investor-landlords. Their profitably projections include lease revenue and asset value growth. Leases are either gross or net.

Annual and 10 Year Population Growth

Industrial property investors use population statistics for purposes that are dissimilar from residential investors. A decreasing populace has a more indirect effect on industrial properties due to a shrinking tax base. Industrial investors need to see that the market’s infrastructure is adequate and sufficiently managed.

An area that is dropping its population will experience weak commercial property value increase in addition to residential. Industrial tenants are ongoing companies that need workers. These renters won’t be comfortable betting on a market that doesn’t provide an expanding amount of acceptable workers.

Property Tax Rates

As we saw with apartment building investments, tax rates are a reliable prediction of the financial viability of a potential location. Inconsistent tax rates prevent you from correctly evaluating your predicted profits in that location.

Our resources about commercial and industrial real estate taxation along with how to reduce commercial property tax in the U.S. will inform you about taxation basics.

Accessibility

The renters in industrial properties produce or distribute significant numbers of goods that are big. Tractor-trailer trucks are typically employed to do this. Industrial properties have to be near major roads so that significant trucks can get to and from them without trouble.

Occasionally industrial businesses transfer their goods by airplanes or railway. Interstate highways typically go adjacent to those types of terminals which is an advantage for industrial sites situated close to those interstates.

Utilities

Manufacturers are likely to utilize significant levels of power and water. A property not having the capability to provide suitable utilities will not attract those businesses.

Retail facilities house renters that sell products or services to individuals. Those properties could house one tenant (single-tenant) or more than one tenants (multi-tenant). Retail companies that have to be by themselves encompass banks, drug stores, restaurants, or auto equipment stores.

A multi-tenant building can be as small as several units, somewhat bigger “neighborhood” or “strip” centers, or bigger centers that are anchored by national brands such as grocery stores. A large shopping center with a mix of categories such as office, retail, and residential are designated “lifestyle” shopping centers.

Retail owners use “net” leases that require the tenants to separately pay for the property’s taxes, insurance, and maintaining the common areas including the parking areas. Net leases additionally say that the tenant takes care of the maintenance of the property.

Retail real estate investors search for the demographic data that their renters will stipulate in their location requirements.

Population Growth

Retail investors don’t only consider the total region’s population and improvement. Their renters are looking at the specific area, or trade area encompassing the suggested location. Retail sites need to be visible and accessible to their customers as they go through their daily activities.

A trade area that does not already have enough “rooftops” will not do for retailers no matter if it is expanding. Investors in retail properties will consider all categories of population data including population size, annual and 10 year growth numbers, and how many people are employed in the area.

Median Income

The population’s wage levels are a critical component of retail location criteria. Larger incomes reveal a good location for higher end retailers, whereas middle wages are suitable for middle income retailers such as car equipment centers.

Median Age

The age of the market’s population can be critical to businesses who rent your property. If you need to identify and maintain good tenants, you’ll need to purchase a building that is located close to their desired age groups.

Property Tax Rates

Tax rate information is studied by retail investors for the same reasons as residential and industrial property buyers. Bigger taxes cause larger rents which increase vacancy rates, and places with growing tax rates often have decreasing property values.

Having your commercial building erroneously valued by the tax office is an unobvious issue that leads even to more expenses. If the value is erroneous, the best commercial real estate attorneys in New Hampshire will advise on how to protest property taxes.

Office space is rented to companies that require a location for their employees to conduct business. Office real estate could be a one level flex space or a multi story building. Significant businesses usually would rather use their cash for company development rather than buying property.

The lease agreement used for office renters is a gross lease, occasionally called a “full service” lease. The rent contains the landlord’s expected costs for utilities, real estate taxes, insurance, and maintenance. This contract may be adjusted to meet the needs of the landlord and the renter.

Long-term investments such as office buildings provide ongoing rental revenue and the projected revenue from the eventual sale of the real estate.

Population

The populace demographic data that office property investors hunt for needs to signify an adequate number of workers for office renters. This usually includes the number of people living there, their education, as well as median age. It’s critical for landlords to know what their potential renters require and to evaluate the region appropriately.

Property Tax Rates

A financially solvent city that ensures a suitable living environment for office workers will keep consistent tax rates. Successful renters will search for that kind of environment.

Incomes/Cost of Living

Higher wages could mean an educated population that many office lessees need. It also gives them an indication of the salary standards required to compete for the optimum employees.

Education

The amount of education completed by the potential market’s population is specifically significant to large office lessees. A call center might not need college graduates, but a law services firm could.

BRRRR, which stands for “buy, rehab, rent, refinance, repeat”, is an investment plan to expand your portfolio by taking advantage of the appreciated worth of the asset. These are long-term or Buy and Hold investments. The investor earns rental income during their ownership and a single payment when the asset’s price improves, then they unload it.

The investor buys a residential property, repairs or improves it, and rents it out. When a positive cash flow is documented, the owner takes cash out of the asset by refinancing their loan. The capital is utilized for the down payment for an additional asset, and the process is duplicated.

It’s unlikely to receive the underwriter’s approval for a conventional multifamily mortgage for real estate necessitating a serious rehab. Such projects carry an unacceptable risk for traditional lenders.

Search through our commercial real estate service provider directory to find the top commercial rehab lending companies in New Hampshire and the best New Hampshire commercial hard money lenders.

From one of the top commercial and industrial real estate agents in New Hampshire, receive an insight on the benefits and drawbacks of the city for your project. They can consult you on the important local real estate trends described further.

Median Gross Rents

Investors want to find desirable current rent levels and evidence of acceptable rental rate bumps. This single item means a lot when the final market determination is made.

Property Value Growth

Buy and hold investments obviously need assets that are supposed to grow in worth.

Population

The pace of the population’s growth is a crucial number to BRRRR investors. Without an expanding population, properties will stay vacant and depreciate.

Income

Apartment building investors have to find out the income level of their prospective tenants. If you are comfortable owning mid-priced real estate, you do not have to see high incomes.

Property Tax Rates

Unreasonable or increasing taxes will be harmful for an investment. Reliable, realistic taxes are a good indication that the market is a strong place for business.

Keep in mind that local tax offices’ assessments of property market worth are frequently inaccurate, which makes investors pay excessive tax amounts unknowingly. If that happens, you may need the services of the best commercial property tax consulting companies in New Hampshire and the best New Hampshire commercial real estate appraisal companies.

To a real estate investor, real estate development refers to the development of any commercial property or a complete residential neighborhood. A developer searches for and purchases acceptable land and develops either lots for purchase or buildings that are rented to occupants.

Property development involves working with zoning approvals, managing sitework plans designed by civil engineers, working with engineers and architects on construction plans, and guiding the project through the local government for approval. Once all of those steps are properly finished, the developer manages the building and marketing of the finished product.

Real estate development can take years to finish. The economy or area regulations can shift in a negative way before the project is done. This is why the most financially risky type of property investing is development.

Various events could force investors to put a construction process on hold. Even when the site is protected against thieves, nobody can prevent natural disasters from causing damage to the unfinished property. You necessitate assistance of the best commercial landlord insurance companies in New Hampshire.

Insurance must be factored in the investor’s project costs for presenting it to a lender. The best commercial new construction financing firms in New Hampshire could suggest a list of companies they think are reliable.

Population

To confirm that their residential and commercial development ventures are situated in favorable places, developers use the same populace size, populace growth, household incomes, and education level of the populace that their desired users need to find.

Income

Retail property developers utilize income levels to place their development where it will attract the buyers that their intended tenants need. A neighborhood that does not attract a high-end retail store could be just what a moderately priced business is searching for.

Office and industrial tenants will want to discover the wage rates that their possible labor pool will require. Developers understand this, and consider income data to predict a location’s desirability for their target tenants.

Education

Employers that lease space in industrial and office developments have particular education statistics in mind for their locations’ citizens. High end firms need to find a majority of college graduates. Industrial businesses hunt for a larger accumulation of high school degrees.

Age

An aging citizenry that more intensively uses public services isn’t what developers are after. Industrial and office developers require a working age populace. Residents who are actively employed normally go shopping and eat out regularly at retail establishments.

Growing families become homebuyers that are the basis of a vibrant residential market.

To invest in promissory notes, the investor pays a lower amount than the remaining amount for loans currently in effect, and takes the place of the first lender. The original lender could be willing to sell because they require money, or because the borrower is behind in their loan payments.

The investor can re-amortize the loan with lower payments providing them a long-term investment with interest revenue payments. If the borrower defaults, the investor maintains all the foreclosure rights of the previous lender and can foreclose to recover their invested money.

Population

Promissory note buyers, similarly to other investors, have to know the volume of people in the possible area and if that number is growing or declining. Investors know right away if an area is a possibility by researching population stats.

Property Values

Growing real property values are the most important sign when promissory note investors analyze a neighborhood. The note purchaser is loaning on the viability of the property and not the borrower’s ability to pay.

Property Tax Rates

When property taxes rise on a regular basis, borrowers who have problems paying their mortgage payments will find it hard to stay current. This is bad for interest revenue, but is in fact desired by investors who expect to turn a profit quicker by taking back the asset.

Real estate investment trusts (abbreviated as REITs) are investment businesses that acquire and oversee revenue producing real estate. They generate income from rent payments and build long-term asset value.

These trusts must distribute ninety percent of net income to shareholders as dividends. The capability to place and take out your cash as your demands dictate make REITs a good method for a typical individual to invest in real estate.

People who buy REIT shares have no input in which units are bought or the way they are operated — they are passive investors.

Those who are going to become passive investors consider buying REITs. They invest in REIT shares once they liquidate real property.

A tax deferred exchange is meant to benefit investors who consider doing so. Learn details about this from our resources: Can You Do a 1031 Exchange into a REIT with a Section 721 Exchange? and A-to-Z Guide to Delaware Statutory Trust (DST) 1031 Exchange.

A 1031 Exchange Qualified Intermediary is required by the Government to be a middleman in the exchange. Contact some of the best 1031 exchange companies in New Hampshire offering this service.

Real estate investment funds are an additional vehicle that pools money to invest in real property. These ventures hold interest in organizations that invest in real estate, such as REITs.

This investment choice does not distribute dividend revenue to their shareholders. The investment return to the shareholder is the expected growth in share value.

Mutual funds, ETFs (exchange-traded funds), and high-end private equity funds are considered real estate investment funds. Similarly to REITS, real estate investment funds give investors liquidity by enabling them to unload their shares on the market at any time.

Investors in funds do not have anything to do with choosing assets or markets, because they are passive investors.