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Market Report

Boston Industrial Investment Forecast

2019 Outlook

Drop-Off in Construction Activity Heightens Competition Among Renters and Investors

Logistics providers lease more space amid few completions, bolstering rents.
A growing consumer base that expects rapid delivery of goods has increased the demand for distribution services, driving a greater need for industrial space. This trend has helped drop the market’s vacancy to half its recession-era rate, and as availability declined, development expanded. Over the past four years, almost 10 million square feet of industrial space was added in the metro, five times the additions in the preceding four years. In 2019, the pace of construction slows considerably, with fewer than a million square feet to be completed. Most of those deliveries are concentrated south of Boston near I-495. The city of Norton alone will welcome 500,000 square feet as part of the mixed-use Bluestar Business Park. A lack of supply additions in other parts of the metro supports a retraction in vacancy this year, while the demand for last-mile delivery lifts asking rents in Suffolk County and surrounding areas.

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