BOSTON– Greater Boston’s industrial market had a tentative start to 2017, with 54,000 square feet of negative absorption during the first quarter. Despite the results, which ended a four-quarter streak of positive absorption, the industrial market has positively absorbed more than 1 million square feet during the past 12 months. The market overview was released in “indSTATus – Q1 2017,” a research report from Transwestern Consulting Group that highlights warehouse, manufacturing and flex properties.
“While the year is off to a slow start, relative to the past few years, the overall trend for the market is still quite positive,” said Chase Bourdelaise, Managing Director of Research and Analytics. “Results for the past 12 months are still overwhelmingly positive, and that long-term view is more indicative of a market than a single-quarter snapshot. The industrial markets have generally followed the overall regional economy, which is still stronger than national averages.”
- Vacancy edged up slightly to 9.0 percent from the previous quarter’s 8.8 percent.
- The market had 157,000 square feet of negative absorption, ending an 18-quarter streak of positive results.
- Average asking lease rates edged up slightly from $6.05 to $6.09 per square foot.
- Even with the negative quarter, since 2013 tenants have positively absorbed 6.4 million square feet of warehouse space.
- Vacancy dropped by 0.7 percentage points to 11.3 percent.
- The market had 103,000 square feet of positive absorption, extending its positive streak to four quarters.
- Average asking lease rates rose to $8.38 per square foot, from last quarter’s $8.26 mark.
- For the first time in two years, all six Route 128 and Interstate 495 submarkets posted positive absorption – totaling 99,000 square feet.
- The flex market posted 9,000 square feet of positive absorption, extending its streak to six quarters of positive growth, with 989,000 square feet of space absorbed during that time.
- Both the vacancy and average asking lease rates remained steady, up 0.1 percentage points to 11.4 percent and up two cents to $10.36 per square foot, respectively.
- The “Boroughs” (Northborough, Southborough, Westborough and Marlborough) totaled 71,000 square feet of positive absorption, driving vacancy to an all-time low of 10.5 percent.