If you own industrial property in Southern New Hampshire, or you’re looking to lease or acquire it, the market you’re operating in today looks meaningfully different from the one that existed two or three years ago. The frenzy is over. That does not mean the market is weak. It means it has matured, and understanding where it stands right now is the difference between a well-timed move and a missed one.
Here is what the Southern NH industrial market looks like heading into the second half of 2026.
The Big Picture: Stabilization After a Hot Run
New Hampshire’s industrial market peaked around 2022 and 2023. Vacancy was historically tight, rents climbed fast, and tenants took whatever they could get. That cycle has corrected. Overall industrial vacancy in New Hampshire is currently running around 5.9% to 6%, up modestly from prior years, as speculative construction delivered new supply while some large manufacturing users exited the market.
The most notable example: Anheuser-Busch’s closure of its Portsmouth brewery and the announced 2026 closure of its Merrimack operation. Those are large, specialized buildings that do not lease quickly. Their vacancy is driving the headline number up, but they tell a company-specific story, not a market-wide one.
The underlying demand picture — particularly for functional warehouse and distribution space — remains active.
What Is Moving and What Is Sitting
The clearest trend in this market right now is the size split.
Small Space (Under 25,000 SF) Is Active
Smaller tenants are completing roughly four times the number of transactions compared to medium and large users. There is genuine demand from regional distributors, trades contractors, light manufacturers, and service businesses that need functional space in accessible locations. If you own a well-located, smaller industrial building in Southern NH, you have options.
Large Blocks Are Harder
Big-box distribution and large manufacturing facilities are sitting longer. Tenants in that size range have more choices, more negotiating leverage, and are taking their time. Owners of large vacant buildings should expect to work harder and price more carefully to get a deal done.
Rents and Rates: Where Things Stand
Rental rates have come off their peak. New Hampshire industrial rents corrected roughly 4.6% to around $11.30 NNN for the broader market. Class A new construction and premium flex space can push higher, but older Class B product — where much of the tenant activity actually lives — is trading closer to that range.
High construction costs have effectively put a floor under new development. Speculative construction has nearly stopped, which matters for the medium-term outlook. Without significant new supply coming online, vacancy should stabilize and rents should firm as demand gradually absorbs existing inventory through 2026 and into 2027.
The Advanced Manufacturing Opportunity
One of the more interesting dynamics in Southern NH right now is the shift in manufacturing demand. Companies are not chasing cheap, old space. They are chasing the right space: high power capacity, modern electrical systems, clear heights, and flexible layouts that can support automation and robotics.
Older specialized facilities — built for one tenant’s specific process — are struggling to find new users. But buildings that offer flexible, high-spec infrastructure are attracting genuine interest from advanced manufacturers, life sciences-adjacent companies, and logistics operators that need more than a basic box.
If you own an older industrial asset, the question worth asking is whether a targeted capital investment to upgrade electrical, HVAC, or structural capacity could reposition the building for this demand segment rather than competing on price alone.
Notable Market Activity
The sale of 80 Northwest Blvd. in Nashua attracted attention across the state. A 337,000+ SF industrial building sold for $67 million to a subsidiary of Nongfu Spring, a Chinese beverage company, for a water bottling and manufacturing operation. The price — nearly four times assessed value — reflected both the scarcity of large-format industrial in the region and growing interest from multinational corporations looking to establish manufacturing footholds in New England.
Elsewhere, leasing activity from logistics users and regional operators has been steady, with deals like the 200,000 SF Analogic lease in Nashua reflecting that demand for functional, well-located space has not gone away.
What This Means If You Are an Owner
If you are a Southern NH industrial owner with a lease rolling in the next 12 to 24 months, now is the time to get ahead of it. Tenants have more options than they did in 2022. They know it. The best outcomes come from owners who engage early, price accurately, and understand what their tenant actually needs.
If you own a building with vacancy today, the answer is rarely to hold firm on asking rate and wait. The market will reward realistic pricing and thoughtful positioning. It will punish the opposite.
What This Means If You Are a Tenant
This is the best leverage environment for industrial tenants in Southern NH in several years. Landlords are more negotiable on rate, TI, and lease term than they were 24 months ago. If your current lease is within two years of expiration, it is worth having a conversation now — both with your current landlord and with the broader market — to understand what your options actually are.
What This Means If You Are an Investor
Industrial in Southern NH still offers a compelling story relative to other asset classes. Vacancy is manageable, demand fundamentals are intact, and the near-halt in new construction sets up a tightening cycle if absorption continues. Properties with smaller tenant suites, strong infrastructure, and good highway access along I-93, I-293, or the Everett Turnpike corridor are positioned well.
The risk is in large, single-tenant manufacturing buildings with limited re-use flexibility. Underwrite carefully, and be realistic about lease-up timelines on anything over 50,000 SF with specialized build-out.
The Bottom Line
Southern NH industrial is not broken. It is in a healthy correction after an overheated run. The market rewards owners and investors who understand the split between small and large, between functional and obsolete, and between well-located and not. For tenants, the window of leverage is open. Use it.
If you own, lease, or are looking to acquire industrial property in Southern New Hampshire or Southern Maine and want a straight read on what it is worth and what the market will bear, reach out.