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Commercial real estate in the Boston Metro area continues to enjoy momentum during 2016. The demand for Boston Metro warehouse and industrial space saw an uptick during the second quarter, echoing a trend that is taking place throughout major cities in the U.S. Here’s what’s happening nationally and locally!

According to Commercial Connections, published by the National Association of Realtors®, e-commerce is the driving force behind the growing demand for warehouse and industrial space. As consumers expect quick and low-cost delivery for goods ordered online, retailers need more distribution centers close to major metros.

E-commerce fulfillment accounts for about 30% of U.S. demand for industrial property. It’s estimated that 50% of all leases signed for buildings greater than 50,000 square feet is driven by e-commerce.

Distribution centers are being developed by various companies across the country, because they improve supply-chain efficiency, and reduce transportation expenses while getting goods to consumers quickly.

Meanwhile, the World Property Journal reports that the Boston Metro warehouse sector has seen a 16-quarter streak of positive absorption, with 6.5 million square feet absorbed during the past 4 years. During the second quarter of 2016, warehouse vacancies dropped 0.5 percentage points to 9.6%.

Flex properties in the Boston Metro have seen positive absorption in 16 of the last 18 quarters, aggregating 2.6 million square feet. During the second quarter of 2016, flexible space saw 259,000 square feet of positive absorption, pushing vacancy down 1.4 percentage points to 11.4%.

As e-commerce continues to grow, and the race to deliver goods to consumers intensifies, analysts expect that more distribution centers will spring up in strategic locations throughout the Boston Metro and around the country. Demand will be met by utilizing and converting existing warehouse, industrial and flex space, and by new construction where feasible.

Ready to begin, relocate or expand your business? Team up with an experienced commercial real estate broker at Jay Nuss Realty Group, LLC! Whether you are thinking of buying or leasing Boston Metro commercial real estate, we can help you find the ideal property. Please contact us today for expert guidance!

Jay Nuss
Jay Nuss Realty Group, LLC
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