Downtown: Office space aplenty, but not enough business

  • A detour sign directs traffic from Storrs Street back up to Main street via Pleasant street extension in Concord on Monday. GEOFF FORESTER

Monitor staff
Published: 4/24/2016 11:40:07 PM

Property owner Mark Ciborowski snaked through the construction tools, past tiny offices, around a work bench and over a pile of sawdust. He stopped at a closed door, and pulled out a key.

And then the door opened into a state-of-the-art office for ErgoSoft Americas Inc., where sunlight filtered through the open floor plan and employees worked quietly on their desktops. The printing company is the newest tenant at Ciborowski’s building at 113 Storrs St., which also connects to nearby Low Avenue. Part of the building is still under renovation, in hopes of attracting another new tenant soon. 

Office manager Kim Kohm said the company had previously leased space in one of Manchester’s mill buildings. But employees found its location near the New Hampshire Fisher Cats stadium wasn’t within easy walking distance of many restaurants, coffee shops or other businesses.

The move to Concord has been a welcome change, she said.

“A few steps, and we’re on Main Street,” Kohm said.

ErgoSoft was also a boon for Ciborowski. Retail spaces are in high demand right now, he said, but offices are harder to fill.

The numbers back him up: Concord has one of the highest office vacancy rates in New Hampshire, according to a recent report to the Concord City Council. The capital city’s rate is 14 percent – higher than Portsmouth, Dover, Bedford and Manchester. At 16.9 percent, only Nashua was higher.

That number has fluctuated. While Concord’s office vacancy rate was 16.5 percent in 2011, in more recent years it has been closer to 13 percent. At the same time, the vacancy rate for retail space in downtown Concord has consistently dropped from 10.3 percent in 2013 to 8 percent in 2016.

Concord also had the second-highest average asking rent: $13.50 per square-foot. Only Portsmouth – $17.50 per square-foot on average – is more expensive.

Building owners and industry experts attributed Concord’s ranking to several factors: the state withdrawing, a glut of new office space and the economy. They also hoped the Main Street project and more aggressive business recruitment on the city’s part would improve that vacancy rate in the future.

At one time, the state leased a significant amount of office space in downtown Concord; for example, the floors above Northway Bank were occupied by state employees for years. But in recent years, those departments have moved their employees to state-owned campuses on Pleasant Street and Hazen Drive.

Carlos Baia, the deputy city manager for development, said that exodus left offices that had not been updated for many years. The state was a stable tenant even if it didn’t pay high rents, he said, so building owners didn’t have incentives or cash to renovate those spaces.

“What that left behind is a significant amount of less than ideal office space,” Baia said.

Enter Michael Simchick and Steve Duprey. Simchick built Capital Commons, adding thousands of square feet of Class A office space on South Main Street. Duprey followed suit with the Pillsbury Building, the Love Building and the Smile Building.

Orr & Reno law firm left its longtime but aging home in the Eagle Hotel for Duprey’s new space at 45 S. Main St. When Brady Sullivan Properties and partner Ben Kelley recently purchased Eagle Hotel from a Massachusetts-based real estate investment trust, it was less than 50 percent occupied, still reeling from Orr & Reno’s loss. Brady Sullivan bought the Eagle Hotel, Capital Plaza One and Two and a parking lot for $7.5 million; their total value is more than $13 million.

“We’ve had a lot of office space built into the market,” Ciborowski said. “That’s certainly driven up the vacancy rates and made rents very, very competitive.”

For his part, Duprey said the residential development in Concord needs to keep up with the commercial development.

“I think what downtown needs a lot more of is apartments and more condominiums,” he said. “I would love to have 300 or 400 people living off Main Street.”

That also means more businesses need to move into downtown Concord, Duprey said, and the city needs to be more aggressive in attracting employers. The city has promised to revamp its economic development plan, and suggestions from the community have included hiring a full-time staff person to recruit businesses.

“We don’t have enough businesses,” Duprey said. “I challenge you to name the last business that moved into the downtown area with 100 employees. I can’t think of one.”

Wendy Keeler, a longtime commercial real estate agent, often lists and leases properties in Concord. She said the market did need to absorb new buildings, but she expected the dust to settle soon. She mentioned spaces filling up, like the slot ErgoSoft took in Ciborowski’s building. She pointed to the downtown construction as a draw.

“The desire’s been for downtown lately,” Keeler said.

Out with the old

Pavement reclaiming will continue this week, according to an email update from the Main Street project PR team.

On Tuesday and Wednesday, the crews will reclaim the remaining pavement between Fayette and Theatre streets. From Wednesday to Friday, they will be grading sidewalks and the newly reclaimed street.

Throughout the week, construction will also include installing irrigation pipes for sidewalk planters between Pleasant Street and Constantly Pizza.

For more information about the Main Street project or to sign up for regular email updates about the downtown work, visit concordmainstreetproject.com.

Courthouse bill moves on

The full New Hampshire Senate will soon deliver a verdict for the Merrimack County Superior Court.

The Legislature has been considering a bill to build a much-needed new courthouse on its current North Main Street site, instead of a plot on Hazen Drive as previously planned. The plan unexpectedly cleared the state House of Representatives, and city and county representatives lobbied for the plan at the Senate Capital Budget Committee earlier this month.

Last week, the committee voted, 5-0, in favor of the bill. If the Senate passes the bill, Gov. Maggie Hassan has previously indicated her support for a downtown courthouse.

The next big
internet sensation?

Marketplace New England has only been on Main Street for about six months, but owner Laura Miller has already won a regional award.

The shop was chosen as the Boston metro area winner in the startup category of Innovations 4 Entrepreneurs. Sponsored by Comcast, the contest rewards small businesses that want to increase their use of technology. Marketplace New England will move on to a final round, which will award six businesses nationally.

Miller, who used to own Imagination Village toy shop, said her business is already working with 180 vendors, including 35 from New Hampshire.

“We’re really interested in growing our business through social media connections for our artists,” she said. “Almost all of them are very small emerging artists, craftspeople not doing it full time. We want to help them grow their enterprise on social media, YouTube and try to really connect the consumer to the maker of the product.”

The award includes a cash prize to advance a business’s use of technology. The next round includes public voting, starting today and continuing through May 13. Visit marketplacenewengland.com for more information, or find the link to vote on the Marketplace New England Facebook page.

(Megan Doyle can be reached at 369-3321, mdoyle@cmonitor.com or on Twitter
@megan_e_doyle.)




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