ABG Commercial Realty  |  (617) 492 9900

View Saved Properties  |   Sign Up

Boston Area Industrial Market Report for Q1 2017

The Boston Industrial market ended the first quarter 2017 with a vacancy rate of 5.7%. The vacancy rate was down over the previous quarter, with net absorption totaling positive 2,244,903 square feet in the first quarter. Vacant sublease space increased in the quarter, ending the quarter at 1,310,455 square feet. Rental rates ended the first quarter at $6.90, an increase over the previous quarter. A total of seven buildings delivered to the market in the quarter totaling 438,996 square feet, with 3,071,019 square feet still under construction at the end of the quarter.

Absorption

Net absorption for the overall Boston Industrial market was positive 2,244,903 square feet in the first quarter 2017. That compares to positive 1,338,570 square feet in the fourth quarter 2016, positive 2,240,347 square feet in the third quarter 2016, and positive 1,661,676 square feet in the second quarter 2016.

The Flex building market recorded net absorption of positive 1,204,289 square feet in the first quarter 2017, compared to positive 439,176 square feet in the fourth quarter 2016, positive 66,366 in the third quarter 2016, and positive 793,856 in the second quarter 2016.

The Warehouse building market recorded net absorption of positive 1,040,614 square feet in the first quarter 2017 compared to positive 899,394 square feet in the fourth quarter 2016, positive 2,173,981 in the third quarter 2016, and positive 867,820 in the second quarter 2016.

Vacancy

The Industrial vacancy rate in the Boston market area decreased to 5.7% at the end of the first quarter 2017. The vacancy rate was 6.1% at the end of the fourth quarter 2016, 6.3% at the end of the third quarter 2016, and 6.5% at the end of the second quarter 2016.

Flex projects reported a vacancy rate of 7.2% at the end of the first quarter 2017, 8.1% at the end of the fourth quarter 2016, 8.4% at the end of the third quarter 2016, and 8.4% at the end of the second quarter 2016.

Warehouse projects reported a vacancy rate of 5.2% at the end of the first quarter 2017, 5.4% at the end of fourth quarter 2016, 5.7% at the end of the third quarter 2016, and 5.8% at the end of the second quarter 2016.

Rental Rates

The average quoted asking rental rate for available Industrial space was $6.90 per square foot per year at the end of the first quarter 2017 in the Boston market area. This represented a 1.8% increase in quoted rental rates from the end of the fourth quarter 2016, when rents were reported at $6.78 per square foot.

The average quoted rate within the Flex sector was $10.49 per square foot at the end of the first quarter 2017, while Warehouse rates stood at $5.88. At the end of the fourth quarter 2016, Flex rates were $10.13 per square foot, and Warehouse rates were $5.82.

Deliveries and Construction

During the first quarter 2017, seven buildings totaling 438,996 square feet were completed in the Boston market area. This compares to nine buildings totaling 491,195 square feet that were completed in the fourth quarter 2016, seven buildings totaling 1,879,842 square feet completed in the third quarter 2016, and 246,248 square feet in 13 buildings completed in the second quarter 2016.

There were 3,071,019 square feet of Industrial space under construction at the end of the first quarter 2017. Some of the notable 2017 deliveries include: 42 Quinsigamond Ave, a 150,682-square-foot facility that delivered in first quarter 2017 and is now 100% occupied, and 115 Hartwell Ave, a 95,000-square-foot building that delivered in first quarter 2017 and is now 100% occupied.

The largest projects underway at the end of first quarter 2017 were 50 Pettengill Rd, a 1,000,000-square-foot building with 100% of its space

Sales Activity

Tallying industrial building sales of 15,000 square feet or larger, Boston industrial sales figures rose during the fourth quarter 2016 in terms of dollar volume compared to the third quarter of 2016. In the fourth quarter, 68 industrial transactions closed with a total volume of $571,090,643. The 68 buildings totaled 6,121,192 square feet and the average price per square foot equated to $93.30 per square foot. That compares to 48 transactions totaling $232,245,965 in the third quarter. The total square footage was 3,892,178 for an average price per square foot of $59.67.

Total year-to-date industrial building sales activity in 2016 is up compared to the previous year. In the twelve months of 2016, the market saw 253 industrial sales transactions with a total volume of $1,521,590,475. The price per square foot has averaged $66.27 this year. In the twelve months of 2015, the market posted 260 transactions with a total volume of $1,190,239,157. The price per square foot averaged $58.24.

Cap rates have been lower in 2016, averaging 7.74%, compared to the twelve months of last year when they averaged 8.05%.

One of the largest transactions that has occurred within the last four quarters in the Boston market is the sale 1 Distribution Center in Boston. This 480,000-square-foot industrial building sold for $41,250,000,

Information provided by CoStar.com

LET US HELP YOU FIND PROPERTIES OF INTEREST.

Best Commercial Real Estate Advice
to Increase Your Investment Returns? Sign-up below...

Get the latest CRE News, Market Trends & Insights to make the best decisions.
Subscribe to our monthly newsletter! Let us better serve you.


First Name
Invalid Input

Last Name
Invalid Input

Email(*)
Invalid Input

Phone
Invalid Input

Preferred Email

Invalid Input
Invalid Input
Invalid Input

We hate SPAM and promise to keep your email address safe.