EagleTribune.com, North Andover, MA


April 7, 2008

Focus: Commercial development still going strong

Commercial development throughout the Merrimack Valley remains strong despite the slowdown in the housing market, according to experts in the field.

Though the cost of certain materials has increased, the lack of activity in the housing market may have steered more developers toward commercial projects. And overall, that increased competition among developers has lowered the cost for anyone looking to build commercial properties.

"There isn't as much construction going on ... therefore, the competition is stronger and you're getting better prices from contractors," said architect George Nammour, of MacLaren Associates of Andover, Mass.

Dennis Delay, deputy director of the New Hampshire Center for Public Policy studies, said commercial building could be affected by the housing crisis, but it hasn't happened yet.

"I haven't really seen much backing off of industrial development in (Southern New Hampshire)," he said. "I think the big issue for New Hampshire is how this residential real estate bubble bursting nationally, and to some extent locally, affects other sectors of the economy."

Nammour added that many of the contractors' expenses are climbing. The price of steel, for instance, increased dramatically more than a year ago and has stayed high since.

Those increases have leveled off somewhat in recent months, according to commercial real estate consultant Christopher Goodnow of Salem, N.H.

"I think it's fair to say that prices have stopped rising in the construction industry, in general," he said.

And while Goodnow doesn't see prices falling — gasoline and petroleum products aren't getting any cheaper — he thinks the prices will stay level throughout the year.

One local company, Brooks Properties, is going full-steam ahead with its building projects.

"Being in New Hampshire, we don't have to charge $18, $19, $20 a square foot," said Eric Brooks, whose father, Harold Brooks, owns the company. Brooks Properties is involved in four proposed commercial buildings in Salem, although not all have approvals.

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