November 02, 2016
Boston Industrial Market Posts Strong Third Quarter
Greater Boston’s industrial real estate market had a strong third quarter 2016, with warehouse properties delivering a fourth consecutive quarter of record low vacancy rates, according to “indSTATus – Q3 2016,” a research report from Transwestern. The report highlights warehouse, manufacturing and flex properties, all of which posted positive absorption for the quarter.
All property types covered in this report are doing very well, but it’s hard not to focus on the warehouse market’s run. A streak of positive quarters is notable, but four consecutive quarters of record low vacancy may be unprecedented. And with Boston’s economy continuing to outperform national averages, we anticipate a solid close to the year.
- Vacancy dropped 0.9 percentage points to 8.7 percent, its lowest point on record, with 302,000 square feet of positive absorption.
- Average asking lease rates rose slightly to $5.98 per square foot from $5.94 last quarter.
- The market is on a 17-quarter streak of positive absorption.
- The manufacturing market had 70,000 square feet of positive absorption, though vacancy edged up to 12.1 percent from last quarter's 10.9 percent.
- Average asking lease rates dropped to $7.86 per square foot, from $8.40 last quarter.
- The Route 128 West submarket is almost completely occupied, with only 3,000 square feet of manufacturing space available.
- The flex market had 35,000 square feet of positive absorption, with vacancy rising slightly to 11.5 percent from last quarter's 11.4 percent.
- Average asking lease rates remain at levels not seen since 2004, with a current price of $10.43 per square foot, up from last quarter’s $10.32 per square foot.
- The average asking least rate has grown 23.4 percent during the past two years.