Southern New Hampshire CRE Enters a More Selective Era - by Doug Martin

After several years of broad demand across nearly all property types, southern New Hampshire’s commercial real estate market is becoming more selective. Colliers’ Q1 2026 research shows tenants and investors are prioritizing quality, functionality, and location, creating a widening divide between best-in-class properties and older less competitive inventory.

The industrial sector continues to lead, but it’s no longer a rising tide lifting all boats. Vacancy ticked up to 6.5% at the end of the first quarter, a 1.2% increase year-over-year, reflecting a market finding its balance between landlord investment strategies and tenant space requirements. In markets like Manchester and Salem, vacancy held relatively steady year-over-year at 4.8% and 7.5% respectively, with new tenant activity absorbing much of what downsizing users left behind. 

Well-located product is still moving. What’s changed is the level of scrutiny. Tenants are more selective, particularly with larger blocks of space. Deals are getting done, but they require alignment on pricing and condition. Smaller users continue to drive activity. That’s been consistent throughout 2025 and has carried into 2026 so far. Warehouse and distribution space has been the only sector to post positive absorption over the past four quarters, with 170,500 SF, largely along the I-93 corridor.

On the manufacturing side, two large campuses totaling nearly 700,000 SF have recently come to market in Manchester and Merrimack that will have some impact on the state’s statistics moving forward. At the same time, we’re seeing companies consolidate or relocate into better buildings, leaving behind older inventory that simply doesn’t compete the way it used to. The gap between functional and obsolete space is widening, and that’s where the opportunity is for owners willing to reinvest.

The office market, meanwhile, continues to evolve and by most measures, it’s stabilizing. Vacancy ended the first quarter at 11.7%, a 2.3% decrease year-over-year, a meaningful improvement driven by both leasing activity and the steady removal of obsolete inventory through conversions. Locally, the story is mixed. Manchester remains relatively healthy at 8.3% vacancy, while Nashua has improved to 11.4%, down 2.3% year-over-year. Salem has seen the most dramatic shift, with vacancy falling roughly 8.2% year-over-year and ending the first quarter at 15.1% – a quiet but significant turnaround worth noting.

From a leasing perspective, most companies are still cautious, and tenants are taking their time making long-term decisions. That said, smaller office users, particularly medical and professional firms, continue to transact, and those deals are keeping the market moving.

Stepping back, this is no longer a market defined by broad trends, it’s defined by execution. Industrial remains strong but selective. Office is stabilizing but still evolving. And across both sectors, the gap between best-in-class assets and everything else continues to grow.

The same themes that shaped the market in 2025 continue to define 2026, with the divide between newer, redeveloped properties and older inventory becoming even more pronounced.

Doug Martin is a principal, vice president, and active broker with Colliers, N.H