Boston Area Industrial Market Report for Q1 2024

Overview

Boston’s industrial market is experiencing a shift. Though the job market remains robust, demand for industrial space has cooled. Nationally, a slowdown in the housing market has reduced the need for warehouse-related goods. Locally, Boston’s large concentration of flex space, catering to the biotech sector, has seen softening demand.

This cooling demand comes alongside a surge in new construction, pushing the vacancy rate to a post-2015 high of 6.3%. Amazon’s massive new facility will further contribute to rising vacancies, projected to top 7% by year-end. This oversupply has significantly slowed rent growth, dropping from over 8% in previous years to 6.6% over the past year, and is expected to dip further in 2024.

Despite the current trends, Boston’s industrial market has a positive long-term outlook. Vacancies are forecast to stabilize around 6% by 2025, well below historical highs. As new space is absorbed and supply growth slows, rents are projected to rebound.

The current market presents both challenges and opportunities. Landlords need to be strategic in their leasing strategies, while tenants can potentially leverage the increased availability to find favorable terms.

Ready to navigate the evolving Boston industrial market? Contact ABG Commercial Realty today. Our team of experts can help you identify the best opportunities and make informed decisions.

Information provided by CoStar.com

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