BOSTON— Greater Boston’s industrial real estate market remained resilient in the third quarter of 2025, buoyed by steady leasing activity—driven largely by renewals—despite ongoing economic uncertainty and the effects of recent tariff adjustments, according to CBRE’s latest market report.
Total leasing volume for the quarter reached approximately 3.02 million square feet, with renewals accounting for nearly 60% of that activity. The report attributes the uptick in renewals to tenant preferences for stability and cost avoidance.
“Tenants are increasingly hitting the ‘easy button’—choosing to renew in place to avoid relocation costs,” the report notes. Early renewals have also become more common, with companies seeking to secure their positions in a market that remains volatile in light of broader economic and geopolitical trends.
Net Absorption and Vacancy
Despite the high leasing volume, the heavy skew toward renewals—which do not contribute to net absorption—led to a quarterly net absorption of -507,414 sq. ft., and year-to-date net absorption of -280,779 sq. ft. Additionally, the return of some larger spaces due to expiring COVID-era leases added pressure to the market.
As a result, overall availability rose by 20 basis points from the previous quarter, landing at 9.8%, while vacancy slightly declined by 10 basis points to 7.6%—thanks in part to limited new construction and several large vacant blocks being leased.
Rent and Construction Trends
Average asking rents held steady at $15.20 per square foot NNN, dropping only $0.06 quarter-over-quarter. With speculative development slowing and a narrower construction pipeline, rents are expected to remain relatively stable into 2026.
CBRE anticipates that increased demand—particularly from third-party logistics (3PL) providers—and mark-to-market renewals could apply upward pressure on lease rates over the next 12 to 18 months.
Although market fundamentals have softened slightly, CBRE expects the Boston industrial market to remain stable through the end of 2025, particularly if demand from larger users materializes in upcoming quarters. However, analysts caution that broader factors—such as interest rate shifts, global trade dynamics, and emerging technologies like AI and robotics—will continue to influence market behavior.
In summary, Boston’s industrial sector is navigating economic headwinds with cautious optimism, as occupiers prioritize flexibility and landlords adjust to evolving tenant preferences and macroeconomic conditions.
