Boston Industrial Maintains Hot Streak

BOSTON-Industrial real estate in Greater Boston marked its fourth consecutive quarter of positive absorption, Richards Barry Joyce & Partners said last week. The sector locally hasn't seen four positive quarters across all three property types—warehouse, flex and manufacturing—since 2007.

Although it has had the shortest winning streak, warehouse has posted the biggest numbers over the past four quarters: 1.7 million square feet, the second highest four-quarter tally in 10 years. Among the biggest warehouse deals of the quarter was Waste Management's moving into 274,000 square feet at a former Boston Globe printing plant at 72 Salem Rd. in Billerica, MA.

Properties in the 495 South submarket represented a particular hot spot, accounting more just 30% of the warehouse inventory in Greater Boston but 75% of the second quarter's absorption. The six-month total of 491,000 square feet of positive absorption in warehouse properties with ceiling heights greater than 28 feet brought the vacancy rate in those properties from 19.4% at the start of 2013 to 14.3% at mid-year.

The flex market ended Q2 at 18% vacancy, down slightly from the 18.3% rate at the end of Q1.  The sector has now seen six quarters of positive absorption, albeit at a moderate rate, averaging 89,000 square feet per quarter. 

The Greater Boston manufacturing market ended Q2 at 15.6% vacancy, down from 16% at the end of the previous quarter. The quarter saw 67,000 square feet of positive absorption, marking the seventh quarter of positive absorption in this property type. Over the past seven quarters, occupancy levels have increased by 537,000 square feet and vacancy has dropped from 18.5% to 15.6%, according to RBJ&P.