Market survey: Lebanon area office vacancy about 14%; industrial market tight but new construction costly

Presenter Chip summarized his working draft market survey for Lebanon and nearby Hanover, dividing commercial stock into Class A, B and C. "The punch line is, if you go to the 2nd page, it summarizes and it's a 14% total vacancy for the office that is here," he said.

Chip said Class A vacancy in the sample was elevated in part because of a large office building being converted to lab use and predicted that vacancy would drop by mid next year. He described Lebanon's industrial vacancy as "the worst I've seen in years" at about 3% and noted new light industrial construction costs that will challenge affordability: "a new 30,000 square foot light industrial building is $380 a foot now, which 7 years ago was $175 a foot." Chip said conversions to lab space (private companies, not DHMC lab space) and local R&D growth are pushing demand for housing and ground-floor uses.

Commissioners asked clarifying questions about recent leases and Chip cited several recent transactions in Centerra and other local activity. The commission discussed how those market dynamics affect downtown Main Street redevelopment choices and the desirability of mixed-use projects versus greenfield options.