After a strong start this year, absorption in the Boston industrial market lost momentum in the third quarter, posting 169,000 SF of negative absorption, although the vacancy rate continued to be strong at 10%. Despite the slowdown in leasing activity, the Boston industrial market is showing 900,000+ SF of positive absorption year-to-date.
Rents are still rising, hitting $10/SF for the market in the third quarter. That is nearly 8% year-over-year growth, and 1.8% of that occurred quarter-over-quarter. This is also the first time net aggregate rents have reached double digits for the market. New and renovated product continues to deliver and enter lease-up, driving the steady rent growth.
Construction continues undeterred by the uncertain economic conditions. Several new buildings started sitework and construction in Q3, while previously underway projects moved closer to completion in the suburban markets. Construction, met by consistent demand in the market, has been successful in both speculative and build-to-suit endeavors.