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NORTHEAST SNAPSHOT, AUGUST 2006
Western Massachusetts Industrial Market
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William Low Jr., Managing Partner, NAI Samuel D. Plotkin and Associates
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Throughout the Western Massachusetts industrial market, trends are allowing the strongest companies to be small manufacturing companies whose customers are within a days driving distance, and where those companies’ product has limited competition. Warehouses servicing Western Massachusetts also are in demand. Overall, rental rates for warehousing product in the market range from $2.50 per square foot to $4 per square foot, while in the manufacturing industry, the rates average between $4 per square foot and $7.50 per square foot. The vacancy rate currently stands at 8 percent.
The majority of development is taking place in East Longmeadow, Chicopee and Agawam, where there is still land available in industrial parks. In Wesson, Performance Food Group is planning a 500,000-square-foot distribution facility, located on land formerly owned by Smith and Wesson. This project will create some jobs for the market, while also creating a significant vacancy in its current location.
Other trends prevalent in the Western Massachusetts industrial market point to the fact that while not many new developers are coming to the area, new investors are acquiring properties that provide a better return than developments located in primary markets. Property owners are working to attract biotechnology and warehouse/distribution tenants. However, the market recently has seen an increase in outsourcing of manufacturing to the southeastern United States and Asia.
Of all the major tenants throughout the market, Lowe’s Home Improvement Warehouse, The Home Depot and Wal-Mart are occupying the most space. The most significant lease signed in the recent months was located at 101 Almgren Drive in Agawam, where VauPell signed a lease for 187,000 square feet.
In the future, look to Smith & Wesson’s land on Roosevelt Avenue, which has the most potential for development. With exposure to Interstate 291, located 2 miles from Mass Pike, the land is situated in a prominent location within the market.
— William Low Jr. is managing partner for NAI Samuel D. Plotkin and Associates in Springfield, Massachusetts.
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