For the first time in history, the Greater Boston industrial market has hit a sub-2.0% vacancy rate as the supply/demand imbalance creates a challenging environment for tenants looking to break into the market or grow their existing operations. Almost 3.2 million sq. ft. of positive absorption was recorded in Q3 and just under 6.0 million sq. ft. year-to-date, highlighting the explosive growth in the region.
The insatiable demand for any available space in the market that exploded during the early months of the pandemic is driving leasing. More than 3.1 million sq. ft. of leasing activity in the third quarter was mainly propelled by wholesale/retailers, 3PLs, life science and e-commerce companies. With over 35 million sq. ft. of tenants actively seeking space and a weak pipeline of new speculative supply, cutthroat competition exists for any remaining functional space.