JLL National Research just released its Q2 North America Industrial Outlook. It is reporting that industrial vacancy is now below a prior cyclical low, and will trend toward 7.0 percent by year-end. Rents are increasing as new development continues to play catch-up after 2010-13 marked a 50-year delivery low.
Rent growth is pronounced in those regions with vacancy rates well below the national average. Southern California, the Northwest and Southwest lead in year-over-year asking warehouse rent increases. Gains are expected as market fundamentals tighten in the Midwest, Northeast, Mid-Atlantic and Southeast.
But how is Boston doing?
- The Greater Boston industrial market experienced its strongest leasing quarter of the year, posting 235,061 square feet of positive net absorption
- Sales activity continues to expand in the sector
- Q2 saw 24 industrial sales transactions from properties over 30,000 square feet
- The development of build-to-suit projects in Greater Boston is becoming more prevalent
- The 495/Mass Pike submarket continued to be one of the best preforming industrial markets in the region
The outlook is good for the Greater Boston market. Build-to-suit projects are beginning to materialize as predicted in the previous quarter, due to the great market conditions and the region’s antiquated supply. We are experiencing the start of a new industrial development cycle with market conditions not seen since the early 2000’s! We expect to see investor activity and more build-to-suit deals in the near future.
View our Boston Industrial Highlights – Q2 2014 research report for more details on Greater Boston’s Q2 performance.