The year 2024 was a turbulent one to be involved in Boston's industrial space, as a number of categories slumped, according to a market report from Colliers. Most notably, investment sales volume is now down 73 percent from its peak level in the June quarter of 2022. While Colliers did not reveal what the specific figure was, it did note that the category is at its lowest level in 10 years.
The biggest deals during the last three months of 2024 occurred in the research and development and manufacturing sectors.
"The Route 495/93 North was home to some of the largest R&D sales in the quarter, such as that of 301 Ballardvale in Wilmington. Properties larger than 300,000 SF traded for a combined total of $142.9 million in that area," Colliers wrote.
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"Similarly, in the Route 495 West submarket, several warehouses [were] larger than 100,000 SF sold."
Vacancy was as high as 12 percent in 2024 in Boston's industrial market. That's up around 2.6 percent from the year before. Vacancies are notably high in buildings finished between 2023 and last year. Excluding Amazon, the rate there is 61 percent. Also, the sublease space of more than 2.9 million square feet represented a 12-year high.
"That significantly differs from market conditions in 2021, when available sublease space reached a record low of 500,000 SF," Colliers said.
Vacancies and higher availability have also put pressure on rents, which have "inched down" from their peak hit in the first quarter of 2024, Colliers said.
With major move-outs in the market from major brands including Amazon and Cardinal Health, net absorption hit negative 465,000 square feet.
However, there were a couple of positives. For one, Colliers highlighted that leasing activity "rounded out" last year. This was thanks to big renewals such as TJX's almost 284,000 square feet in Braintree and Wayfair's 110,000 square feet in Norton.
Another thing is vacancies might be showing signs of least stabilizing. While available sublease space nearly doubled over the past year, the direct rate actually dipped in the fourth quarter by 329,000 square feet. The category that seems to be showing the most improvements for vacancies is those occupying distribution buildings, which include high bays and warehouses.
"After a period of increased construction, fewer distribution buildings were delivered in the fourth quarter, allowing vacancy to catch up," Colliers said.
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