Boston Office Market

Arthur Trey Agnew III, senior director, Cushman & Wakefield

Boston’s industrial market is a complex entity with a variety of submarkets including food production, transportation, logistics, cross docking, airport operations and maritime expansion. Depending on the geography, use and caliber of an industrial building, rental rates range from $7 to $15 triple-net lease. Although there has been a slight reduction in supply, positive absorption has been occurring in the Boston area with the overall industrial vacancy in the inner suburbs steady at 12.8 percent.

Maritime uses in and around Boston Harbor continue to be major drivers of the regional economy. The port is a prime location for industrial development because it can be easily accessed by train, bridges and major highways. Industrial facilities that specialize in ship repair are beginning to emerge and strengthen the Boston Harbor area as well.

The Boston industrial market is in a fully mature development stage and new industrial development is virtually non-existent because of the high cost of developable land. The sector is seeing, however, industrial development 25 to 30 miles outside of Boston due to the greater availability and reduced price of land. General Electric is currently selling 40 acres of land in Everett, Massachusetts, that can house two or more industrial companies.

Scott M. Gredler, associate,
Cushman & Wakefield

Currently, industrial land is selling for $1 million per acre in the inner suburbs of Boston; thus, commanding development into higher revenue uses such as office or residential space. The most popular trend in Boston has been the repositioning and redevelopment of old industrial spaces into mixed-use developments that include residential and office space anchored by retail components. 

Because of Boston’s close proximity to New York City, its strategic access to many connecting roads and highways and its accessible harbor, it will remain a strong industrial city. Tenants will continue to demand industrial space; thus, there will be a continued need for and a demand for industrial development. Specialty industrial companies will also continue to thrive due to product specialization, shipping costs and product modifications.

— Arthur Trey Agnew III is a senior director and Scott M. Gredler is an associate at Cushman & Wakefield in Boston.

©2007 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.

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