Competition for modern warehousing and manufacturing facilities is heating up in the Boston Metro, driving up lease costs. According to an analysis by CBRE, as reported in Boston Bisnow, asking rents for industrial properties increased over 6% on a year-over-year basis. The first quarter of 2021 saw rents trending at $10.27 a square foot for these properties.
The demand for large industrial spaces, with high ceilings and multiple loading docks, has surged among e-commerce and biomanufacturing companies. Vacancy rates reached a new low of 3.8% during the first quarter of 2021. Facilities encompassing 250,000 to 500,000 square feet have a vacancy rate of 3.3%; facilities larger than 500,000 square feet have a vacancy rate of just 2.7%.
Industrial tenants face the likelihood of rising rents for the foreseeable future. There is more demand for Boston Metro industrial space than there is capacity to develop it, due to the economic and logistical challenges that exist in constructing such facilities in Massachusetts. As a solution, developers are likely to leverage infill strategies by purchasing and razing obsolete properties.
Despite the rising cost of industrial space, the Boston Metro remains a top destination for employers attracted to our tech-ready infrastructure and our highly-educated workforce. Tenants should be prepared for a competitive leasing environment, and secure tenant representation for help in finding and obtaining the best solutions for their needs.
When you are ready to begin, relocate or expand your business, team up with the Jay Nuss Realty Group, LLC! Whether you are thinking of buying, leasing, or investing in Boston Metro commercial real estate, we can help you find the ideal property.
Contact us today for commercial real estate guidance!