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Boston Area Industrial Market Report for Q2 2020

Overview

Although that rate of growth dipped slightly, in the second quarter, the market still held strong.

Rent growth was at a rate of 5.2 percent midway through the year, with vacancies at 4.7 percent. Amazon has been the most notable player, leasing up 1 million square feet throughout Massachusetts, and continues to seek more space throughout the state. Amazon’s increased presence is largely due to the global pandemic shifting the focus to online shopping, and subsequently raising the necessity for distribution and warehousing properties. Forecasts from CoStar data also suggest the demand for logistics space, medical and life sciences, food and cold storage should also remain consistent despite the potential recession.

Even if impacted by a recession, the industrial market has proven to take lesser hits. In 2008, rent drops were limited to 4 percent. Prior to that, the drop is 2001 was 3%. As of the end of the July, rents keep growing, which could change but CoStar’s data indicates seem to be relatively safe.

For sales, industrial pricing and investment had rapidly increased over the past several years, and that holds true as of the end of Q2 2020. So far, the market has seen $1.6 billion in sales volume, and prices increased second only to multifamily, with the best gains year over year — exceeding the industrial national by more than 200 basis points.

Information provided by CoStar.com

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