No one is claiming commercial real estate is back to its pre-COVID norms in New Hampshire.

But new second-quarter CRE data shows that the state’s office, industrial and retail submarkets all seem to be stabilizing at a “new normal” after five years of various booms, busts and a lot of activity in between.

According to data from both Colliers International and Cushman & Wakefield, the statewide office vacancy rate last quarter fell to just over 10 percent, from nearly 14 percent the year prior, as tenant demand slowly improved and some of the last office-to-residential conversions took place.

Meanwhile, the industrial market’s recent mild correction has nevertheless left the subsector with a healthy supply-and-demand balance that shows no sign of major near-term change.

And, finally, the brick-and-mortar retail sector, which was devastated by COVID-era lock downs and consumer flights  to at-home delivery services, has staged a major comeback in general across the Northeast and U.S., according to commercial brokerage data.

All in all, the state’s overall CRE sector appears to be in relatively good shape after a half-decade of sometimes volatile change.

“For a tertiary market, New Hampshire is holding its own,” said Riley McMullan, senior research manager at Cushman & Wakefield. “Looking ahead, we don’t see a lot more shockwaves coming, positive or negative.”

The two words industry executives most commonly use to describe the state’s overall CRE market in interviews for this story: It seems to have reached a “new normal.”

Following is a look at the first half of the year’s “new normal” in three of the state’s four main CRE submarkets: office, industrial and retail. The Registry Review will take a look at the fourth major CRE subcategory, multifamily housing, at a later date.

Office Market in Better Shape than Most

New Hampshire’s office sector wasn’t hit nearly as hard as other U.S. markets following the COVID-era lockdowns and subsequent mass employee shift to remote work.

To this day, the state’s overall office vacancy rate of just over 10 percent stands in stark contrast to nearby Greater Boston’s current 23 percent office vacancy rate and the 18 percent national office vacancy rate, according to brokerage data.

Most industry observers attribute New Hampshire’s comparatively resilient office market to the fact there was little or no office overbuilding during pre-pandemic years.

Still, the state’s office market took some major hits as a result of pandemic lockdowns and the lasting transition to remote work, prompting some landlords in Manchester and elsewhere to convert some older office buildings into residential units, helping push vacancy rates in those submarkets down.

Most recently, Brady Sullivan Properties announced that it plans to covert roughly one-third of the former Liberty Mutual office campus in Dover into residential units.

That planned conversion alone played a role in the state’s office vacancy rate falling from nearly 14 percent a year ago to 10.2 or 10.3 percent in the second quarter, according data from Colliers and Cushman & Wakefield, respectively.

But tenant demand has also slowly grown in recent quarters, as many firms have adopted hybrid work schedules for employees – a sort of compromise between full-time office work and full-time remote employment.

The hybrid schedule push has forced many employees back into offices, at least for a few days per week.

Small Companies Drive Office Leasing

With a jobless rate now hovering around 3.4 percent, New Hampshire’s strong economy has also contributed to a healthier statewide office market, industry observers agree.

Kristie Russell, head of research at Colliers New Hampshire, noted that the state’s office market is now mostly driven by smaller companies seeking smaller amounts of space.

The 99,000-square-foot 325 Corporate Drive at the Pease International Tradeport used to be fully leased by Bottomline Technology.

But since Bottomline moved out a few years ago, all but 12,000 square of that space has been leased to about five other tenants, Russell said.

“We haven’t seen a lot of larger leases,” she said. “Instead, it’s mostly slow bits and pieces being rented out. It’s taking more time, but the leasing is happening.”

Indeed, office net absorption has steadily increased over the last four quarters in New Hampshire, according to Colliers data.

Manchester and Concord appear to have the strongest office markets in New Hampshire, with vacancy rates of about 7.9 percent each, according to Colliers.

As for second-quarter asking rents, they rose by a healthy 3.5 percent in the second quarter, compared to the year prior, to about $22.22 per square foot, brokerage data shows.

Larger leases are indeed happening, such as HiArc’s recent combined leases of about 100,000 square feet of space at 100 Innovation Way and 10 Tara Boulevard, both in Nashua, according to Colliers.

Still, most office activity is centered around companies searching for more modest-sized deals, not large long-term transactions, said Austin Stebbins, an associate at the Boulos Company in Portsmouth.

“We’re seeing a lot of groups taking smaller spaces,” said Stebbins, whose district office covers mostly the Seacoast area of New Hampshire. “The office market is finding its new norm.”

Industrial Market Balancing

As office vacancy rates have slowly fallen across the state, industrial vacancy rates have steadily climbed over recent quarters.

But that’s not necessarily bad news.

CRE experts say the once red-hot industrial market – driven during and immediately after COVID by a seemingly insatiable demand for more warehouse/distribution space from large e-commerce companies – has cooled down in recent quarters, becoming a more balanced and flexible market in the process.

Once as low as 2.7 percent, the statewide industrial vacancy rate now stands at about 6 percent, according to brokerage data.

But asking prices have remained surprisingly strong of late, hovering around $12.33 per square foot in the second quarter, up 67 cents compared to the year prior, according to Cushman & Wakefield.

Bottom line: industrial space continues to thrive in a more balanced market.

“Compared to offices, industrial has performed really, really well in recent years,” said Cushman & Wakefield’s McMullan.

Bob Rohrer, managing director at Colliers New Hampshire, agreed that the industrial subsector remains a star within CRE, despite the recent mild corrections.

“It’s not as hot as it once was,” he said. “It’s not killing it. But it’s still very good.”

In particular, the Nashua area has recently seen “robust demand” for industrial space in recent months, according to industry data.

But the Manchester area remains the largest and strongest industrial submarket in the state – with a vacancy rate of only 3.1 percent, according to Cushman & Wakefield.

While warehouse/distribution space was once the market darling, light industrial and flex-manufacturing spaces have really shined as of late.

Among other things, many light manufacturing companies in Massachusetts have recently opted to move their operations to New Hampshire, considered a more business friendly state by comparison, CRE officials say.

Retail Market at End of Painful Adjustment

According to data from Colliers, the national retail vacancy rate stood at 6 percent as of the end of the second quarter, below the historic national average of 7.4 percent.

That may sound impressive, but the low rate was ultimately achieved at a terrible cost over recent years, mainly via the mass closures of many retail stores and shopping malls, their downfalls tied directly to the rise of e-commerce.

Some of those retail properties were ultimately torn down and/or converted into mixed-use developments.

Meanwhile, many retail property owners started aggressively courting new types of tenants, from fitness centers to health-care clinics to higher-end restaurants.

The overall retail adjustment was painful, but it seems to have worked.

In the Northeast, the retail vacancy rate is now 6.2 percent, but the Greater Boston retail vacancy rate, which includes southern New Hampshire, is only 4.3 percent, according to Colliers data.

“Retail has had a quieter comeback than most people expected and it deserves more credit than it gets,” Colliers wrote in a recent report. “Neighborhood and necessity-based retail, grocery-anchored centers, service-oriented strip properties, and net leased single-tenant assets have outperformed broader market expectations.”

The same report added: “In New Hampshire, the retail story is playing out across a few distinct categories. Distressed vacancies are being absorbed: former pharmacy locations are being subdivided and re-tenanted, while other vacant sites are attracting owner-users and redevelopment capital.”

The report noted that a former Rite Aid in Pelham recently sold to AutoZone for $1.75 million – “a straightforward example of necessity retail backfilling gaps left by pharmacy closures.”

The report concluded: “Retail is expected to be one of the standout sectors for investment volume growth through the balance of 2026.”