Record Low Vacancy For Warehouse Properties Drives Strong Industrial Market

8/10/16

Findings Released in Transwestern | RBJ’s “indSTATus – Q2 2016” Report

Greater Boston’s industrial real estate market had a strong second quarter 2016, according to “indSTATus – Q2 2016,” a research report from Transwestern | RBJ. The report highlights warehouse, manufacturing and flex facilities, all of which posted positive absorption for the quarter.

“Greater Boston’s warehouse market is on a historic run right now, with three consecutive quarters of record-setting low vacancy rates,” said Northeast Research Director Chase Bourdelaise. “With the manufacturing market also back into positive territory, we now have all three industrial-related property types firing on all cylinders. While we don’t expect record-setting results each quarter, the market is well-positioned for the remainder of the year.”

WAREHOUSE

  • Vacancy dropped 0.5 percentage points to 9.6 percent, its lowest point on record and first time below 10 percent, on 529,000 square feet of positive absorption.
  • The market is on a 16-quarter streak of positive absorption, with 6.5 million square feet absorbed during that four-year stretch.
  • Asking lease rates dropped from $6.04 per square foot to $5.94 per square foot.

MANUFACTURING

  • After a negative first quarter 2016, the manufacturing market posted 52,000 square feet of positive absorption, dropping vacancy to 10.9 percent from 11.0 percent last quarter. 
  • Since the start of 2015, the manufacturing market has posted a solid 160,000 square feet of positive absorption. 
  • Asking lease rates rose from $8.28 per square foot last quarter to $8.40 per square foot, its highest level since 2008.

FLEX

  • Another strong quarter in the flex market saw 259,000 square feet of positive absorption, pushing vacancy down 1.4 percentage points to 11.4 percent. 
  • Flex properties have seen positive absorption in 16 of the last 18 quarters, aggregating 2.6 million square feet during that time.
  • Average asking lease rates hit the highest level since 2004, at a current price of $10.32 per square foot, up from last quarter’s $9.22 per square foot.


Download the full “indSTATus – Q2 2016” report at http://twurls.com/boston-industrial-2q16.

In addition to “indSTATus,” Transwestern | RBJ 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.