Boston— After a period defined by rising vacancy driven by a wave of new supply, the Boston industrial market is beginning to regain momentum, with the first quarter of 2026 signaling a meaningful shift toward recovery and stabilization, JLL reports.
According to first-quarter market data, tenant demand has accelerated sharply, reaching approximately 21 million square feet—an increase of 16% from the previous quarter and more than 80% year over year. This surge is being driven largely by larger occupiers re-entering the market, signaling renewed confidence after a more cautious 2025.
Leasing activity is following suit. Total leasing volume climbed to 2.8 million square feet in Q1, with net new deals accounting for 57% of that total—the highest level since the third quarter of 2024. Notably, the average deal size has grown significantly, reflecting a shift toward larger, more strategic commitments by tenants according to JLL.
“Big-box” users are playing a central role in the market’s resurgence. More than one-third of active tenants are currently seeking spaces of 100,000 square feet or more, with several requirements exceeding 500,000 square feet. In total, 50 tenants are in the market for large-scale space, underscoring a decisive return of major industrial players.
Despite a substantial influx of new supply, vacancy has remained stable at 8.1% for the quarter. This resilience comes even as 1.23 million square feet of new space was delivered—much of it speculative and delivered vacant. At the same time, the market recorded 1.28 million square feet of positive net absorption, marking the second consecutive quarter exceeding one million square feet and the strongest back-to-back performance in two years.
Supply-side pressures are also beginning to ease. The construction pipeline has contracted significantly, with 3.76 million square feet currently underway—the lowest level since mid-2021. Importantly, more than 83% of that space is already preleased, limiting future speculative exposure. Only 315,000 square feet of speculative space is expected to deliver for the remainder of the year.
This pullback in development, combined with rising demand, is beginning to tighten availability—particularly for large-block spaces within the Interstate 495 corridor, where options are becoming increasingly scarce.
Rental rates showed early signs of stabilization as well. Average asking rents rose slightly to $15.21 per square foot, up 1.1% from the previous quarter, though still down 2% compared to a year ago. Concessions, however, continue to rise, reflecting ongoing competition among landlords.
Several notable leases highlighted the quarter’s activity, including a 300,000-square-foot deal by Champagne Logistics in Milford, a 248,000-square-foot lease by Primo Brands in Taunton, and a 234,000-square-foot commitment by Owens & Minor in Franklin.
Overall, the Boston industrial sector appears to be entering a new phase—one characterized not by rapid expansion, but by disciplined growth and a steady rebuilding of market confidence, according to JLL.
