Lincoln Property Company | 53 State Street, Boston, MA | 617.951.4100 | LPCBoston.com FEW LARGE BLOCKS Only 2 options above 400K STRONG LARGE USER DEMAND Multiple 500K+ requirements DECREASING INVENTORY Conversion to multifamily and retail LAST MILE LOCATIONS Rents approaching $25 NNN COMPLEX DISTRIBUTION PROCESSES Multiple warehouse property types FIRST QUARTER 2018 INDUSTRIAL MARKET TRENDS 495 495 495 128 Greater Boston’s Industrial market has shown tremendous growth during the past 24-36 months, vacancy is near record lows and rents are exceeding previous highwater marks. A significant portion of the demand surge stems from the Boston’s steadily growing population base which has increased 9% over the past 7 years. The combination of increased population density and today’s “on demand” delivery environment has pushed the industrial envelope. The lack of viable development sites, particularly for 500,000 SF or larger facilities, has generated tremendous competition for modern high-bay warehouse and as a result rents have jumped significantly. Well located, quality construction is commanding $7.00 NNN and on the sale cap rates have compressed to 6.0% for comparable product. BOSTON NORTH 6.1% VACANCY $6.75/SF NNN WEST 3.0% VACANCY $6.82/SF NNN SOUTH 7.8% VACANCY $5.69/SF NNN Submarket Inventory SF % Vacant % Available Quarterly Absorption Annual Absorption Asking Rate (NNN) West 23,993,410 3.0% 7.8% 32,200 5,140 $6.82 North 48,465,390 6.1% 9.3% (1,182,870) (1,207,380) $6.75 South 45,615,090 7.8% 14.5% 191,580 (222,410) $5.69 Suburbs 118,073,890 6.1% 11.0% (959,090) (1,424,640) $6.23 Inner 10,036,850 5.4% 13.5% (187,230) (358,740) $11.10 Total 128,110,740 6.1% 11.2% (1,146,320) (1,783,390) $6.57
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FIRST QUARTER 2018 INDUSTRIAL - LPC Boston · 19 Alpha Rd Chelmsford VJ Electronix 20,000 107 Audubon Rd Wakefield Standex Engraving Group 17,500 140 Locke Dr Marlborough Signal Fire
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Lincoln Property Company | 53 State Street, Boston, MA | 617.951.4100 | LPCBoston.com
FEW LARGE BLOCKS Only 2 options above 400K
STRONG LARGE USER DEMAND Multiple 500K+ requirements
DECREASING INVENTORY
Conversion to multifamily and retail
LAST MILE LOCATIONS
Rents approaching $25 NNN
COMPLEX DISTRIBUTION
PROCESSES Multiple warehouse property types
FIRST QUARTER 2018
INDUSTRIAL MARKET TRENDS
495
495
495
128
Greater Boston’s Industrial market has shown tremendous growth during the past 24-36 months, vacancy is near record lows and rents are exceeding previous highwater marks. A significant portion of the demand surge stems from the Boston’s steadily growing population base which has increased 9% over the past 7 years. The combination of increased population density and today’s “on demand” delivery environment has pushed the industrial envelope.
The lack of viable development sites, particularly for 500,000 SF or larger facilities, has generated tremendous competition for modern high-bay warehouse and as a result rents have jumped significantly. Well located, quality construction is commanding $7.00 NNN and on the sale cap rates have compressed to 6.0% for comparable product.
BOSTON
NORTH6.1% VACANCY$6.75/SF NNN
WEST3.0% VACANCY$6.82/SF NNN
SOUTH7.8% VACANCY$5.69/SF NNN
Submarket Inventory SF % Vacant % AvailableQuarterly Absorption
Annual Absorption
Asking Rate (NNN)
West 23,993,410 3.0% 7.8% 32,200 5,140 $6.82
North 48,465,390 6.1% 9.3% (1,182,870) (1,207,380) $6.75
South 45,615,090 7.8% 14.5% 191,580 (222,410) $5.69
3 Industrial Way Wilmington Argix Logistics 55,700
50 Commerce Norton Nestle Water 41,300
301 Ballardvale Wilmington Monogram Foods 23,200
118 Lumber Lane Tewksbury Kenworth Northeast 16,500
Lincoln Property Company | 53 State Street, Boston, MA | 617.951.4100 | LPCBoston.com
THE SWISS ARMY SPACE
R&D, Office, Manufacturing & Storage
NEW ECONOMY TENANTS
Robotics, Biotech & Autonomous Vehicles
SUPPLY CONSTRAINTS
New flex not being built, warehouse conversions
PARKING COUNTS UPFlex space becoming more densely
occupied
RENTS ON THE RISEDouble digit is the new standard
FIRST QUARTER 2018
FLEX/R&D MARKET TRENDS
495
495
495
128
The Greater Boston flex market has become the home many of today’s most innovative tenants. The type of tenants that have been filling the flex market are shifting away from generic warehouse use and incorporating elements of office, R&D, manufacturing and product testing. Typically requiring 13’+ clear and large open floorplates these “new economy” tenants include market segments such as robotics, biotechs and autonomous vehicles.
Looking forward expect the market to maintain very tight vacancy rates and average rents will continue rising. Current market conditions are the result of strong demand and weak supply. As construction costs continue rising, the delivery of new flex space becomes increasingly challenging so watch for the conversion of older, lower clear height warehouse buildings into flex uses.
BOSTON
NORTH9.3% VACANCY$9.59/SF NNN
WEST8.6% VACANCY$12.06/SF NNN
SOUTH5.4% VACANCY$10.33/SF NNN
Submarket Inventory SF % Vacant % AvailableQuarterly Absorption
Annual Absorption
Asking Rate (NNN)
West 23,627,030 8.6% 15.7% (670,930) (442,530) $12.06
North 30,545,150 9.3% 14.9% (242,030) (102,190) $9.59