Aug. 28—Landlords offering warehouse, manufacturing and flexible spaces are asking for record-high rents.

The owner of a Manchester apartment complex just garnered a record-high sales price for a single transaction in New Hampshire.

And home prices are hovering at historic highs as potential buyers factor rising interest rates into their mortgage payments.

All create ripples through the state's economy.

"In the industrial market, I would say for the most part, it's adding jobs, especially with a lot of new companies coming into the market," said Kristie Russell, research manager for New Hampshire and Maine at Colliers, a commercial real estate firm.

For the quarter ending in June, overall rents landlords asked for rose by 28.3% in New Hampshire from a year earlier, according to a Colliers quarterly report.

The vacancy rate in the Manchester submarket for 17 million square feet of industrial space stood at a record-low 0.4%.

"Industrial is white-hot, period," said Tom Farrelly, executive director for the New England region for Cushman & Wakefield, a commercial real estate company.

"The demand far exceeds supply, which is only going to drive up rents further," Farrelly said. "There's a lack of new projects in the pipeline. Those projects that are in the pipeline are mostly designed as logistic warehouse projects, which are not necessarily designed for manufacturing."

Qualified expansion

Farrelly recently was involved in closing a deal to sell four buildings in the Manchester-Nashua area for $69 million — nearly $10 million more than a Brady Sullivan entity sold them for about five years ago, he said.

Albany Road Real Estate Partners LLC sold nearly 600,000 square feet of buildings to Lincoln Property Co., a Texas firm making its first foray into New Hampshire, Farrelly said.

The properties — industrial and flex space — housed 18 tenants and were 94% leased. They include two in Manchester — at 1050 Perimeter Road and 645 Harvey Road near the airport — as well as 5 Wentworth Drive in Hudson and Nashua's 22 Cotton Road, where defense contractor Raytheon is its largest tenant, according to Farrelly.

Flex space can be a combination of warehouse, office and/or lab space, Russell said.

But not every company wanting to expand can.

"We see some of the smaller companies are having a hard time finding space," Russell said. "It's more the bigger names being able to expand more easily."

With supply-chain issues over the past few years, Russell is "seeing more companies storing more things in-house," she said.

"A lot of construction companies are pre-buying materials, so they don't run into delays in their construction projects," Russell said.

New construction can often mean higher rents.

"Because the market is so hot, a lot of landlords are knowing that and can get a lot more money" when vacancies occur in existing buildings, Russell said.

"With industrial demand so high, we don't think it's going to slow down dramatically," Russell said, cautioning about "the unknown crystal ball."

Record apartment deal

Halstead Manchester, a 640-unit apartment complex spread over 16 buildings on Country Club Drive, sold for $164.6 million, according to a recent announcement from the seller.

"This sale represents the largest total consideration for a single apartment transaction in the state's history and marked the successful conclusion of our investment strategy for the asset," said Josh Solomon, president of The DSF Group.

"The New Hampshire market continues to be the top performing market in all of New England," he said in a statement.

However, Halstead Manchester didn't set a record for sales price per unit, according to Robert Gagne, chairman of the Manchester Board of Assessors.

Last spring, the sale of Countryside Village's 448 units generated more than $271,000 per unit.

To show how prices appreciated for apartment buildings in Manchester, the record sales price per unit in 2019 was less than $175,000 for Waterford Place.

"$200,000 is now a regular occurrence," Farrelly said.

It's all about math.

"You know where rents are going," Gagne said. "When you buy something, it's going to cover all the expenses, including the mortgage, and put some profit in your pockets."

According to New Hampshire Housing, rents for a two-bedroom apartment in Manchester increased nearly 13% between 2019 and this year. Rents this year ranged up to $3,349 a month for two bedrooms.

Single-family homes

Last month, the median price for a single-family home statewide dropped to $450,000 — $10,000 lower than in May and June, according to the New Hampshire Realtors. July's median price was 11.1% higher than the previous July.

Several factors contributed to a quieter market for 13 Seacoast-area towns.

"With inventory recovering, but still near record-low July levels, interest rates almost double what they were a year ago and uncertain economic news, real estate agents logged just 72 sales, off 25% from last year and 29.4% from last month," said a monthly report from the Seacoast Board of Realtors.

The monthly median sale price was $648,500 in July, down 7.9% from last year.

A 30-year fixed mortgage stood at 5.55% Thursday at Freddie Mac, a company that buys mortgages and repackages them to investors.

That was nearly double the rate of a year ago.

What's Working, a series exploring solutions for New Hampshire's workforce needs, is sponsored by the New Hampshire Solutions Journalism Lab at the Nackey S. Loeb School of Communications and is funded by Eversource, Fidelity Investments, the New Hampshire Charitable Foundation, Dartmouth-Hitchcock Medical Center, the New Hampshire College & University Council, Northeast Delta Dental and the New Hampshire Coalition for Business and Education.

Contact reporter Michael Cousineau at mcousineau@unionleader.com. To read stories in the series, visit unionleader.com/whatsworking.