The coronavirus pandemic has created great uncertainty for New Hampshire’s commercial real estate landlords, particularly those who own or manage retail and office space.
More than half of the state’s small businesses have seen their revenue decrease by 50 percent or more thanks to the coronavirus shutdown, according to a survey of 1,549 small businesses in the state by the NH Small Business Development Center (SBDC) and the University of New Hampshire Survey Center.
Businesses in 172 cities and towns responded to the survey between June 10 and June 24. Around half were classed as non-essential businesses during the state’s shutdown. Respondents, on average, had 15.8 full-time employees in February and 21.9 total employees.
Firms in the retail and hospitality trades made up 24 percent of respondents. Together, professional and technical services, finance and real estate made up another 14 percent. Arts, entertainment and recreation made up another 11 percent, while health care and social assistance made up another 10 percent.
The virus’ impact is being most keenly felt among businesses with few employees and those in the arts, entertainment and recreation industry or the accommodation and food service industry. Between 2 in 3 and 3 in 4 businesses in each of those categories reported losing 50 percent or more of their revenue.
Many, but not all reported losing workers due to the pandemic. Forty-seven percent of responding businesses had the same number of employees now as they did in February while 43 percent had fewer employees.
“We knew businesses were struggling but the survey data quantified the problems and gave us ideas on how we can best support companies going forward,” Liz Gray, state director of the NH SBDC, said in a statement. “Maintaining sales/revenue and customers were by far the biggest concerns, with more than four out of five participants saying they are very or somewhat concerned with maintaining sales, customers and revenue. A majority of respondents are very or somewhat concerned about access to capital, supply chain disruptions, timely payment of bills, liability with following health guidelines and cleaning the work environment as their business recovers.”
In addition to declining revenue, respondents reported a range of other problems. Supply chain interruption was a particularly acute issue for 38 percent of respondents in the construction industry and 41 percent of respondents in the retail industry.
The survey showed small businesses are receiving some help. Sixty-one percent of respondents had applied for a Payroll Protection Program loan, while another 28 percent had applied for an Economic Injury Disaster Loan from the Small Business Administration. Another 10 percent said they had applied for an SBA loan deferment program. Thirty-nine percent of respondents said they had applied for the state’s Main Street Relief Fund, but 38 percent said they had applied for none of a range of state and local assistance programs.
Going forward, 61 percent of businesses said they were somewhat or very concerned about being able to access capital and 32 percent said they were somewhat or very concerned about defaulting on existing loans. Nearly all were worried about maintaining sales or revenue, and 65 percent said they were concerned about being able to pay bills on time.
“Most participants are confident they can continue operating in the short term, but about 1 in 6 say they are not very or not at all confident their business will be operating 12 months from now,” Gray said. “This is where the NH SBDC already is and can continue to be helpful. Together with other economic development partners we can keep small businesses alive and thriving in the Granite State.”
If there is a silver lining to the data, it is that the survey also revealed new ideas and opportunities businesses identified through the pandemic, Gray said. These included: better communication with customers, partnerships with other small businesses, and new and expanded ways to do business like ecommerce, takeout and curbside pickup. Most businesses plan to continue these changes going.
While most of New Hampshire’s commercial real estate brokers have told The Registry Review they have not yet seen a surge in companies trying to downsize by subleasing space, that fate of the state’s office market is considered a “great unknown” as white-collar firms debate their future needs and face financial pressures due to declining sales. Traditional retail, by contrast, is expected to see a contraction in the face of a slow recovery to sales and competition from e-commerce firms.
