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Industrial/Flex See Price Stabilization in Q3

BOSTON-Although vacancy rates are lower, so are prices, as the market adjusts to the economy and a supply constraint for newer product.

By Ryan Clark | Updated on October 20, 2008

BOSTON-With a financial crisis in full swing, Boston ‘s flex and industrial markets are experiencing positive absorption, as of the third quarter according to Richard Barry Joyce & Partners’ Q3 numbers. Vacancy increased for warehouses, since 570,000 sf of new construction was delivered, although in manufacturing vacancy dropped 1.8% to 15.5%. Flex space seems to be faring well, with four consecutive quarters of positive absorption.

The I-495 attracted positive absorption of manufacturing with 546,000 sf over the past five quarters, which is 95% of market demand. The 495 North submarket had 227,000 sf of positive absorption this quarter. The major industrial deals were Ashforth Co. and Paradigm Properties taking 44-48 Third Ave.–81,000 sf–in Somerville and Genzyme picking up 2-8 New York Ave. in Framingham at 102,000 sf and Colony Realty Partners grabbing the 186,000-sf 145 Plymouth St. in Mansfield. DivcoWest grabbed the 385,000-sf flex properties 300 RiverPark Dr. and 400 RiverPark Dr. in North Reading.

The steady numbers, however, tell a deeper story in this tumultuous market. The flex buildings–with lower vacancy–dropped asking lease rates $0.09 to $9.21 per sf and manufacturing rents were reduced 4% to $8.18 per sf.

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