- Vacancy growth in the quarter had the largest increase in recent years, but the rate is still significantly below the 10-year average.
- More than two million square feet of new product was built this in the quarter.
- More speculative projects broke ground in the fourth quarter, for a total of more than 14 million square feet of all space underway.
- Rents decreased slightly.
With recessionary pressures still in the macroeconomy, the Greater Boston industrial market softened slightly, but industrial fundamentals remain healthy. At 6.2% vacancies had their most significant rise in recent quarters but they are still below pre-pandemic levels in Q1 2020 of 7.8%. More than 2 million square-feet of new product was delivered in the quarter, both spec and build to suit properties, and spec ground breakings continued to happen despite economy uncertainties.
Absorption finished negative at 363,205 square feet but in the North market, the only one to have positive absorption, more than 1.4 million square-feet was absorbed this quarter. Rents have started to soften coming off historic highs as the market evens out. The uncertain macroeconomic climate at the end of 2022 led corporations nationwide to shelve large requirements, Boston included. In Q4, however, some of that demand for large space has come back, with multiple big-box retailers looking for one million square feet or more.