Boston Industrial Market Report

Boston poised for stabilization this year. While the market’s supply pressure eased notably in 2025, contributing to the smallest vacancy increase in three years, the metro also recorded its highest level of net space relinquishment since 2004, partially because larger tenants remained cautious after rapid expansion in prior years. In 2026, vacancy and rent should stabilize further. The trend is expected to be most evident in submarkets along Route 128, which recorded the metro’s largest vacancy increases last year. The corridor’s comparatively large share of mid-box and flex inventory contributed to weaker performance. However, further stabilization is likely as tenant footprint optimization eases and leasing activity in the first quarter of 2026 improves from prior-year levels. A similar dynamic is expected along Route 495, where a larger concentration of big-box space also contributed to elevated net space relinquishment last year. Conditions there should start to improve as well, particularly if manufacturing sector performance strengthens.