Link Logistics and Saracen Properties recently broke ground on a major speculative project in Revere, targeting the last-mile, air freight and cargo markets. Image courtesy of Gilbane Building Co.
Vacancies in Greater Boston’s industrial market have risen for eight straight quarters, topping 11 percent as a recent development surge has left many newly-completed properties still seeking tenants.
The industrial market’s downward turn mirrors the lab market’s supply-demand imbalance coming out of the COVID-19 pandemic, when demand for both life science and distribution space spiked before being tempered by 11 Federal Reserve interest rate hikes in 2022 and 2023.
The availability rate in Greater Boston’s 208 million-square-foot industrial market is more than double the 5.5 percent level in early 2022, brokerage Colliers reported this week.
The decline in demand is deterring additional speculative projects, limiting the supply pipeline which will decline to the smallest level in years, Colliers researchers Jeff Myers and Makella Houdagba wrote in the report. Available space is nearing a decade-long high.
One major speculative project is beginning construction in Revere, targeting the last-mile, air freight and cargo markets. Link Logistics and Saracen Properties completed financing for the Trident Logistics Center’s building A, a 376,000-square-foot warehouse on the former Global Petroleum property on Route 1A. Construction of a large cold storage facility will begin next year in Fall River following the sale of a parcel at 10 Innovation Way by developer VMD Companies.
Another tenant-leased project is planned in Westminster, where Equity Residential acquired an approved development site on Theodore Drive for $16.9 million that is leased to Home Depot for a 600,000-square-foot distribution center.
The 84.5 million-square-foot south suburban submarket, the region’s largest, had a 12.9 percent availability rate at the end of the third quarter, up from 11.5 percent the previous quarter.
During the past year, Greater Boston’s industrial development pipeline shrank from 2.3 million to 1.9 million square feet, according to a separate report by Commercial Edge.
