Boston industrial market insights
Q3 2023
Industrial investment sale volume in Q3
As the 10-year treasury yield continues to increase, Boston is seeing less and less investment sale volume. However, in Q3, $391.5 million was registered, the highest amount of quarterly investment volume seen throughout 2023. General warehouse and distribution facilities have proven to be of strong demand, accounting for 66.3% of the total industrial investment sale volume this quarter.
Positive net absorption in Q3
In the third quarter of 2023, Boston posted a positive net absorption of 279,762, equating to 0.1% of the inventory. However, the availability rate has increased to 270 basis points over the last twelve months to 9.5%. This has mainly been driven by recently delivered and speculative distribution projects witnessing a slow down in leasing activity. Conversely, warehouse, manufacturing, and flex/R&D assets have maintained a single digit availability rate.
SF construction starts in 2023
Greater Boston is on track to post the least amount of construction starts since 2020, concluding that developers are less bullish compared to the prior three years. Out of the 37 industrial projects underway, 35% of the new supply is preleased. Comparatively, 64% was preleased in the third quarter of 2022. Looking ahead, this is could potentially put downward pressure on availability with a decrease in speculative project starts allowing the existing pipeline to be further leased up.
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