C&W: Boston Industrial Sector Due for Cyclical Reset
After two years of strong demand driven by a booming economy and the rapid growth of e-commerce, Boston’s industrial sector is experiencing a cyclical reset, according to a U.S. Industrial Construction report published by Cushman & Wakefield.
As the construction of new industrial spaces reaches its peak, demand is beginning to slow down, signaling a return to a more balanced market. Despite economic uncertainties, high inflation, and interest rates, the industrial market in Boston remained positive in the first quarter of 2023. Leased industrial space amounted to 1,017,259 square feet, with a net absorption of 1,091,979 square feet. Vacancy rates decreased slightly to 4.2%.
Looking ahead, tenant demand is expected to decelerate, aligning with earlier stages of the expansion cycle, as consumer spending shifts and economic conditions soften. However, rent growth is projected to remain stable due to high occupancy rates in the industrial sector.
Emily Fu is Content Director of Connect Commercial Real Estate, where she covers the east coast markets, including New York, Boston & New England, and DC & Mid-Atlantic markets. She produces daily news stories as well as longer-form content, ranging from Q&As to thought-leadership pieces. She also writes feature stories for Connect Money.
With previous stints at Reuters, Seeking Alpha, and Commercial Observer, Emily has covered the finance side of the commercial real estate industry, technology, media, telecom (TMT), and fashion. She attended the Columbia Graduate School of Journalism and currently resides in Manhattan.