Boston Industrial Market Finished 2014 Strong

BOSTON—Following up on a strong third quarter, the industrial market in Greater Boston posted nearly 800,000 square feet of positive absorption in the fourth quarter of 2014.

According to a report released on Tuesday by Transwestern | RBJ entitled “indSTATus – Winter 2015,” the vacancy rates for warehouse, flex and manufacturing properties all fell as compared to the preceding quarter.

“We are in the midst of a very strong period in the industrial market, with the second consecutive quarter of positive absorption in each of the three property types,” says Chase Bourdelaise, research director for the Northeast for Transwestern. “In fact, vacancy in the warehouse and flex markets have dropped to levels not seen since 2002 and 2008, respectively.”

The fourth quarter closed with vacancy at 12.4% in the warehouse sector, down from 13.2% the previous quarter. The fourth quarter vacancy rate was lowest level the Greater Boston market has seen since 2002. Asking lease rates of $5.76-per-square-foot were up from $5.73-per-square-foot from the previous quarter. The warehouse market posted its 10th consecutive quarter of positive absorption at 457,000 square feet.

The flex sector posted a 16.1% vacancy rate in the fourth quarter of 2014, down fron the 17.0% rate in the third quarter. Its year-end rate was the lowest level since 2008. Flex tenants absorbed 189,000 square feet of space, while asking lease rates rose to $8.45-per-square-foot from $8.29 in third quarter.

Rounding out the Greater Boston industrial market, the manufacturing sector closed the fourth quarter with a vacancy rate of 12.0%, down from 12.9% the previous quarter. Manufacturing tenants absorbed 147,000 square feet of space, and asking lease rates were up to $7.16-per-square-foot from third quarter's $6.70. The asking lease rate has grown by 9.4% in the past 12 months, Transwestern reports.