In the first quarter of 2015, the Boston industrial market showed minimal change from Q4 of 2014. The vacancy rate stayed the same in both quarters, at 8.0%; however, that number was down from Q3 of 2014, where the vacancy rate was at 8.3%. The overall vacancy rate for flex and warehouse projects went down, from 10.7% to 10.6% and from 7.5% to 7.2%, respectively. The overall sublease vacancy rate went down for flex projects; however, it increased for warehouse projects, although for both projects, the increase or decrease was not largely significant.
Boston’s industrial market showed a negative net absorption rate, of 65,196 square feet; in the previous quarter, net absorption was at 1,755,890 SF. Similarly to the overall absorption rate, the warehouse absorption rate reflects the negative percentage, but contrastingly, the flex absorption rate reflects a positive number of 37,133 SF.
The rental rates for the quarter saw a 2.3% increase, from an average of $6.23 per square foot from Q4 of 2014 to $6.38 per square foot in Q1 of 2015. On average, the quote price per square foot for flex properties was $9.81, whereas the rates for warehouse properties were $5.43. Compared to Q4 of 2014, the flex rates saw an increase, but the warehouse rates saw a decrease, from $9.72/SF and $5.31/SF, respectively.
During the quarter, only one building was delivered, at 11,598 square feet; this number reflects a decrease from Q4 of 2014, where three buildings totaling 105,500 SF were delivered. Overall, the industrial market in Boston showed minimal change from Q4 of 2014, however, rental rates did go up on average, even though vacancy rates stayed the same and net absorption reflected a negative number.
-Boston Business Journal