Rachel Marks
Senior VP/I&L Market Leader
CBRE Boston

"Boston’s growing industrial base provides investors with strong growth prospects from a diverse set of both traditional and life-science-focused manufacturing, warehousing and logistics industries."


Although the Boston metropolitan area is relatively small geographically, it is the fourth most densely populated region in the U.S. Nearly 24% of its 7.1 million residents within a 50-mile radius of downtown are in the 18-to-34 age demographic. The region’s population is expected to grow by at least 3% over the next five years. Boston’s central location within New England gives it access to approximately 14.7 million households within a one-day drive.

Figure 1: Boston Population Analysis
Distance from Downtown Boston (miles)

Source: CBRE Location Intelligence.

Boston’s local warehouse labor force of 50,658 is expected to grow by 3.5% over the next 10 years, according to CBRE Labor Analytics. The average salary for non-supervisory warehouse workers is $15.57 per hour, 12.5% above the national average.

Figure 2: Boston Warehouse & Storage Labor Fundamentals

Source: CBRE Labor Analytics.


Over the past five years, there have been 505 economic incentive deals in the Boston metropolitan area, totaling more than $434 million at an average of $19,284 per new job.

According to CBRE’s Location Incentives Group, among the top incentive programs available in metro Boston is the Economic Development Incentive Program (EDIP), which provides discretionary tax credits to businesses in exchange for retaining and/or creating new full-time jobs and committing significant private investment. Tax credits are typically non-refundable and can offset a company’s annual state income tax or corporate excise liability.

Another metro Boston incentive program is the Workforce Training Fund Program, which provides grants to Massachusetts companies for employee training programs.

Figure 3: Top Incentive Programs

Source: WAVTEQ.


Boston is New England’s regional distribution center, primarily served by national hubs in Chicago and major mid-Atlantic markets in New Jersey, Pennsylvania and Northern Virginia. The “last mile” dynamics associated with e-commerce demand provide a major boost to the local industrial market.

Nearly 90% (178.6 million sq. ft.) of Greater Boston’s total warehouse real estate inventory lies along the Route 128 and I-495 corridors. Route 128 accounts for 63.3 million sq. ft. and I-495 the remaining 116.7 million sq. ft. In the urban core, increased demand for commercial and residential property conversions to industrial use and competition for control of the last mile around the populated “Inner Ring” have caused a spike in asking and taking rents.


Demand for industrial space in Boston has surged since the start of the COVID-19 pandemic, largely due to increased inventory stockpiling requirements, the continued rise of e-commerce and greater demand from life sciences companies. E-commerce drives the need for buildings with high ceiling heights, numerous loading docks and convenient access to major highways and transit systems. As demand outpaces existing supply, developers are looking to provide relief in an increasingly tight market. The pandemic-related focus on health care has also led to increased demand from life sciences companies for warehouse space, particularly for biomanufacturing, raw materials storage and finished goods storage.

Industrial net absorption in Boston increased by 53.8% year-over-year in 2020 to 4.0 million sq. ft., lowering the vacancy rate to 3.8%. What little space remains available in many cases is functionally obsolete, thus creating an even tighter market than statistics show. By comparison, the overall U.S. market has a vacancy rate of 4.6%. Demand has outpaced supply in Greater Boston by a total 8.8 million sq. ft over the past five years.

Despite the need for new construction, barriers to entry in Greater Boston are significant relative to other parts of the country, primarily due to a lack of viable land parcels for large-scale development. There is only 1.2 million sq. ft. of warehouse space currently under construction market-wide (1.1 million sq. ft. of build-to-suit space and 100,000 sq. ft. of speculative space). These tight market conditions led to a 6.2% increase in asking rents since year-end 2019 to $10.27 per sq. ft. triple-net.

Driven by rising e-commerce sales, strong market fundamentals and a diverse tenant base, Boston will remain one of the country’s top industrial growth markets for the foreseeable future.

Figure 4: Boston Historical Data

Source: CBRE Research, Q1 2021. Costar for construction data (> 20K only).

Figure 5: Boston Size Range Comparison

Source: CBRE Research, Q1 2021. Costar for construction data (> 20K only).

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