The Boston industrial market has seen vacancies rise to 7.2% over the past six months while still well below the historical average, according to Colliers’s Q1 2023 Industrial Report. The rise in vacancy rates is primarily due to new products completing construction and coming into demand rather than companies giving back space. The increased inventory is being driven mainly by new high-bay products. 

The report further points out that millions of square feet in uncommitted underway products, with near-term deliveries expected to put upward pressure on vacancies and limit rent growth. However, the e-commerce sector is expected to continue providing a solid foundation for future industrial absorption, with online sales in the US reaching a record-high of $262 billion, representing 15% of all retail sales.  

Personal consumption expenditures have remained resilient despite economic headwinds, and Massachusetts retail sales growth remains firmly in positive territory, exceeding the national benchmark last year.