Low Vacancies Might Force Boston's Industrial Market To Look Up
The industrial market is no longer the red-headed stepchild in Boston CRE.
Transwestern Consulting Group announced Wednesday it had secured two loans totaling $22M for NorthBridge Partners for the real estate investment firm’s acquisition and leasing costs on two warehouses in Greater Boston.
One, a 345K SF Class-A, high-bay warehouse at 100 Adams Road in Clinton, Massachusetts, is fully occupied and includes a 30-foot clear height, 53 loading docks and modern construction. The other property is a 91K SF, Class-A, high-bay warehouse at 23 Sycamore Ave. in Medford, Massachusetts, four miles from downtown Boston.
The deal comes at a time when vacancies are low, and developers are exploring how Boston can accommodate a surge in demand for last-mile distribution. The Interstate 495 West submarket consists of 1.8M SF of high-bay warehouse space with a 9.1% vacancy rate at the end of Q3. The Boston core submarket consists of 625K SF of warehouse space with no vacancy at the end of the same period, according to Transwestern data.
One solution is to build up.
“What we probably will see are multistory warehouses,” The Seyon Group principal Andrew Iglowski told Bisnow in November. "It’s being done in other parts of the country, like Seattle, and other parts of the world."
High-density, high-cost markets with a limited supply of land like Tokyo have been building multistory warehouses to accommodate demand on smaller properties. As the U.S. sees a rise in e-commerce and its accompanying last-mile delivery practices, domestic markets have begun to replicate the Asian markets.
Prologis, the world’s largest warehouse owner, announced last year it would build the first multistory warehouse in America. It broke ground in April on a three-story, 590K SF fulfillment center in South Seattle. The levels are connected via ramps and freight elevators.