2019-07-12_DTZ戴德梁行_Industrial_Q2_2019_Greater_Boston_3页_282kb

Greater Boston Industrial Market Q2 2019 Summary

Core Content

The document provides an analysis of the industrial real estate market in Greater Boston and Southern New Hampshire for Q2 2019, highlighting economic and market indicators, key transactions, and future outlook.

Main Economic Indicators

• Boston MSA Employment: Increased slightly from 2.76M in Q2 2018 to 2.79M in Q2 2019.
• Boston MSA Unemployment: Declined from 3.1% to 2.6%.
• U.S. Unemployment: Decreased from 3.9% to 3.6%.
• Vacancy Rate (Overall): Rose from 6.2% to 7.9% in Q2 2019.
• YTD Net Absorption (Overall): Increased significantly from -44k to 556k square feet.
• Under Construction (Overall): Decreased from 1.8M to 1.0M square feet.
• Average Asking Rent (Overall): Increased from $7.30 to $9.46 per square foot (psf) per year.

Market Overview

The industrial market in Greater Boston showed a decline in vacancy rates at mid-year 2019, with an overall vacancy rate of 6.9%. The warehouse sector was the main driver of this decline, recording over 900,000 sf of absorption year-to-date.

Key submarkets include:

• Boston: 6.9% vacancy rate, 556,156 sf net absorption.
• Boston North: 18.1% vacancy rate, minimal net absorption.
• Boston South: 8.5% vacancy rate, positive net absorption of 13,930 sf.
• Boston West: 5.6% vacancy rate, strong net absorption of 537,473 sf.
• Inner Suburbs: 9.6% vacancy rate, negative net absorption of 216,745 sf.
• Southern New Hampshire: 7.6% vacancy rate, positive net absorption of 83,773 sf.

Key Transactions

Lease Transactions (Q2 2019)

• 200 Domain Drive, Stratham, NH: 246,000 sf leased to VF Outdoor/ Timberland (Manufacturing).
• 301 Bartlett Street, Northborough: 99,000 sf leased to MSHQ (Warehouse).
• 17 Forge Parkway, Franklin: 84,000 sf leased to AR Metalizing (Warehouse).
• 333 Providence Highway, Norwood: 43,850 sf leased to Organogenesis, Inc. (Flex).
• 250 Ballardvale Street, Wilmington: 25,000 sf leased to Red Bull Distribution (Warehouse).

Sales Transactions (Q2 2019)

• 52 Pettengill Road, Londonderry: 614,200 sf sold for $50,600,000 / $82 psf (Manchester).
• 19-53 Brigham Street, Marlborough: 169,200 sf sold for $18,210,000 / $108 psf (495 West).
• 400 Charter Way, Billerica: 57,000 sf sold for $12,750,000 / $224 psf (495 North).

Outlook

The industrial market in Greater Boston is showing a positive outlook, particularly in the warehouse sector. Warehouse rents have increased to $8.59 psf (NNN), up 25% year-over-year. Approximately 1.3 msf of warehouse space is under construction and is expected to continue driving rent increases through 2019. Most of this new construction features clear heights exceeding 36 feet, suitable for high bay distribution centers.

The overall industrial market is well-positioned for growth in the second half of 2019, with a healthy warehouse sector and increasing demand. Despite the potential threat of trade wars, the market remains resilient due to the ongoing shift toward a service-based economy with a focus on technology and analytics.

Contact Information

• Ashley E. Lane
  Director
  Tel: +1 617 279 4570
  Email: Ashley.Lane@cushwake.com

• Matthew B. Smith
  Senior Research Analyst
  Tel: +1 617 279 4589
  Email: Matthew.Smith@cushwake.com

• Beth A. Findley
  Research Analyst
  Tel: +1 617 204 4105
  Email: Beth.Findley@cushwake.com