(Read more on the industrial market.)
WOBURN, MA-It was not a banner summer for suburban Boston's northern industrial sector, but a 30,000-sf lease to Allied Building Supply is providing a bit of a boost going down the home stretch of 2007. The East Rutherford, NJ-based firm is expanding and relocating its regional operations to 41 Atlantic Ave.
"It's a good deal for the market," offers Lincoln Property Co. VP Rob Cronin, who negotiated Allied's five-year agreement on behalf of the tenant. The landlord was represented by Sam Oddo of Oddo Inc. A single-story structure located near Interstates 93 and 95, 41 Atlantic Ave. is owned by Atlantic Avenue Associates, controlled by a private investor from Connecticut.
Commercial real estate in the northern tier of Route 128 is increasingly being weighted towards office product, and record pricing along the Route 128 Central corridor has spirited some tenants north to explore more cost-effective alternatives in such communities as Burlington, Woburn and Wakefield. But while leasing activity for office product has been brisk in 2007, deals have been harder to come by for industrial properties. According to data from Jones Lang LaSalle, industrial absorption for the submarket was in the red by more than 81,000 sf during the third quarter, erasing a modest gain through mid-year to put the YTD level at minus 54,000 sf.
Despite the recent slowdown, Cronin says conditions are generally positive for the submarket going forward, with several industrial, logistics and manufacturing requirements circulating. Even with the harsh summer, the north is holding its own on fundamentals as well. JLL puts the vacancy rate at 8.5% for an inventory of 10.8 million sf. The north is the third largest of seven in Massachusetts tracked by JLL, which puts the area's average asking rate for industrial at $7.36 per sf, second only to the statistically insignificant Route 128/Massachusetts Turnpike submarket, which has 1.5 million sf and an average asking rate of $9.59 per sf. It is also the only other submarket besides the north in single digits on vacancy rates, posting a 3.6% mark. The overall industrial vacancy rate for suburban Boston is 19.5%, says JLL.
Allied Building Supply will move to its new space in early 2008, says Cronin. The firm selected the building for a variety of reasons, he says, including proximity to a new transportation center.
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