Trends point to the industrial and office markets entering 2026 with greater clarity and stability - by Katherine Gemmecke

Across the New Hampshire office and industrial markets, 2025 was a year of purposeful adjustment that helped set the stage for a more balanced environment. Office users continued to right-size, favoring smaller, higher-quality spaces, while property owners responded with upgrades, amenities, and creative repositioning. Industrial activity normalized after several years of rapid growth, with demand focused on efficient, well-located facilities with modern specifications. Together, these trends point to a market entering 2026 with greater clarity and stability. Below is a closer look at conditions across the Seacoast office and industrial sectors as reported in The Boulos Company’s 2026 New Hampshire Market Outlook which will be released in February.

Seacoast Office Market: Composition and Availability
The Seacoast office inventory remains diverse, spanning downtown cores, suburban office parks, and mixed-use environments. Larger blocks of space continue to face longer marketing timelines, particularly those requiring significant capital investment or featuring outdated configurations. In contrast, suites under several thousand square feet, especially those with existing finishes, are seeing steady absorption across multiple submarkets.

This has reinforced a clear divide between commodity office space and best-in-class offerings. Tenants with near-term occupancy needs are prioritizing cost certainty and speed to occupancy, placing a premium on buildings that minimize upfront capital expenditures and construction timelines.

Tenant Behavior and Rightsizing Trends
“Rightsizing” remains a defining theme of the current office cycle. Many higher-end users are using lease expirations to recalibrate space needs, often reducing square footage while upgrading overall quality.

Rather than dense bench-style seating, tenants are shifting back toward more traditional layouts. Private offices, flexible meeting rooms, and thoughtfully designed collaborative areas are increasingly preferred, paired with higher-end finishes and intentional design that supports productivity, retention, and in-office engagement.

Smaller Space, Turnkey Demand, and Adaptive Reuse
Smaller office suites requiring little to no tenant improvements continue to drive activity. Landlords investing in spec suites or refreshed spaces are benefiting from shorter vacancy periods, particularly among professional services firms, medical-adjacent users, and small corporate offices seeking polished environments without construction risk. Co-working and flexible office models remain viable, especially in walkable downtown locations.

Adaptive reuse is also expected to play a growing role in reshaping office inventory. A notable example is the potential partial office-to-residential conversion at Liberty Ln. in Dover by Brady Sullivan, reflecting broader efforts to reposition underutilized assets.

Seacoast Office Outlook for 2026
Entering 2026, the Seacoast office market is defined less by macro recovery and more by strategic repositioning. Buildings offering flexibility, quality finishes, and efficient footprints are expected to outperform, while owners of obsolete space face increasing pressure to reinvest or repurpose. The office market is not disappearing, but refining to reflect how space is used today.

Seacoast Industrial Market Overview
The Seacoast industrial market remains stable but slow, characterized by cautious occupiers and constrained development. Tenant demand is soft across the size spectrum, from users seeking roughly 1,000 s/f to those requiring more than 100,000 s/f. Most industrial users are maintaining existing footprints, resulting in reduced market velocity and longer lease-up periods.

Industrial spaces are, in some cases, taking six months or longer to lease, a notable shift from prior years. While leasing inventory remains relatively tight, availability has begun to increase. Vacancy rose for a second consecutive year in 2025, driven by added supply rather than tenant contraction.

Asking rents have seen little movement due to limited inventory and a lack of high-quality product. Instead of reducing rents, landlords are offering greater flexibility through concessions such as tenant improvement allowances, free rent, and commission coverage.

Industrial Trends and 2026 Outlook
High-bay warehouse space continues to show the strongest resilience, particularly facilities with 30-ft.-plus clear heights, efficient layouts, and ample loading capacity. Tenant preference is increasingly skewed toward newer construction that supports operational efficiency and scalability, as demonstrated by continued expansion at the Pease Tradeport by users such as HCA (d/b/a Portsmouth Hospital) and Georgia-Pacific.

Looking ahead, another year without new speculative industrial construction is expected. Elevated construction costs and rent levels that do not support development economics will likely keep the market stable but slow, favoring well-located, high-quality assets and providing tenants with increased negotiating leverage

Katherine Gemmecke is a senior associate with The Boulos Company, Portsmouth, N.H.