Legendary Demand for Warehouse and Industrial Inventory in Greater Boston ContinuesJuly 19, 2019 - By Brendan Carroll - Perry Research
BOSTON–In it’s Q2 Steel Report by Perry Brokerage, Greater Boston continues to experience a legendary expansion of its occupancy base accompanied by numerous distinct yet simultaneously occurring drivers.
The desire of e-commerce retailers to provide instant consumer fulfillment continues to profoundly effect demand for smaller footprint urban commercial spaces, along with massive new distribution centers at the regional periphery. The legalization of recreational marijuana use in Massachusetts has quickly resulted in the entrance of out-of-market cultivators of the product, with nearly 100,000 sf of inventory in development within 40 miles of Boston expected to increase to more than one million sf of high ceiling, warehouse-like space in the near term.
According to the research by Perry’s Brendan Carroll, as high demand for specific types of industrial space continues, occupants will continue to face significantly higher than inflation rent increases close to the regional core, with the largest requirements moving farther out to achieve economically justifiable development opportunities.
Quick Warehouse Hits:
• Vacancy dropped 0.6 percent to 7.1 percent as tenants absorbed 475,000 sf and average asking rents spiked $0.51 to $6.95 per sf.
• Amazon agreed to lease a 3.6 million sf facility at 1600 Osgood Street in North Andover to be developed by Hillwood; the structure will incorporate a portion of a former 1.6 million sf Lucent campus.
• Rent averages rose aggressively driven by a new view toward urban warehouse importance and increasing economics for new facilities.
Read the Full Steel Report here.