Warehouse Properties Continue Record-Setting Pace, Drive Positive Quarter For Industrial Market

10/21/16

Findings Released in Transwestern’s “indSTATus – Q3 2016” Report

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,” said Northeast Research Director Chase Bourdelaise. “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.”

WAREHOUSE

  • 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.

MANUFACTURING

  • 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.

FLEX

  • 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.

Download the full “indSTATus – Q3 2016” report at: http://twurls.com/boston-industrial-3q16.

In addition to “indSTATus,” Transwestern publishes 10 other quarterly research reports: “officeSTATus,” which focuses on Greater Boston’s office market and individual “marketSTATus” reports on nine crucial submarkets. The firm’s biotechnology-focused report, “bioSTATus,” is released twice a year. In total, the firm produces 46 reports per year, in addition to custom research projects for clients.

ABOUT TRANSWESTERN

Transwestern is a privately held real estate firm of collaborative entrepreneurs who deliver a higher level of personalized service – the Transwestern Experience. Specializing in Agency Leasing, Management, Tenant Advisory, Capital Markets, Research and Sustainability services, our fully integrated global enterprise adds value for investors, owners and occupiers of all commercial property types. We leverage market insights and operational expertise from members of the Transwestern family of companies specializing in development, real estate investment management and research. Transwestern has 34 U.S. offices and assists clients through more than 180 offices in 37 countries as part of a strategic alliance with BNP Paribas Real Estate. Experience Extraordinary at transwestern.com and @Transwestern. For updates from the Boston office, follow @TranswesternBOS.