BOSTON – The market for
industrial real estate in Greater Boston continued its positive momentum
through the final quarter of 2013, according to findings published in
“indSTATus – Winter 2014,” a new research publication from Transwestern | RBJ
that highlights warehouse, flex and manufacturing properties.
The industrial market capped 2013
with a four-quarter absorption total of 4 million square feet, the region’s
highest amount since 2000. The overall market is riding an 11-quarter positive
absorption streak, during which occupancy has increased 6.1 million square
feet.
“When you are comparing positive
market conditions to those not seen in more than a decade, then it’s clear that
the market is doing well,” said Brendan Carroll, senior vice president,
Transwestern | RBJ. “For the past 18 months, we’ve only seen one quarter of
negative demand, in the manufacturing sector. Given that we are looking at
three property types, that’s a remarkably telling statistic.”
Following are highlights from the
fourth quarter for each of the industrial property types.
Warehouse Market – The quarter
closed with a vacancy of 14.2 percent, down from 15.6 percent the previous
quarter, and positive absorption of 793,000 square feet. Asking lease rates are
$5.45, up $0.08 from the previous quarter. Warehouse vacancy has fallen from
19.8 percent to 14.2 percent since the second quarter of 2012, marking the
lowest level in 11 years. Tenants have driven positive demand for six
consecutive quarters, during which 3.4 million square feet has been absorbed.
Flex Market – The quarter closed
with a vacancy of 16.9 percent, down from 17.6 percent the preceding quarter,
and positive absorption of 182,000 square feet. Asking lease rates of $8.29 are
up from the previous quarter’s $8.21. Tenants have now driven positive
absorption for eight consecutive quarters, during which occupancy has grown
843,000 square feet.
Manufacturing Market – The
quarter closed with a vacancy of 12.8 percent, a slight increase from last quarter’s
12.5 percent, with 41,000 square feet of negative absorption. Despite the
increase in vacancy, asking lease rates of $6.55 are up from $6.40 the previous
quarter. The negative demand broke what had been an eight-quarter streak of
positive absorption.