Q2-2018-IndustrialReport
Q2
INDUSTRIAL STATISTICS MANUFACTURING
2018
MANUFACTURING
TOTAL INVENTORY (SF)
TOTAL VACANT (SF)
TOTAL VACANCY RATE
Q2 NET ABSORPTION (SF)
YTD NET ABSORPTION (SF)
ASKING RENT ($/SF)
Vacancy and Net Absorption
TOTAL
34,846,731
2,389,547
6.9%
49,236
6,702
$9.38
600
10%
2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017
400
8%
200
VACANCY & NET ABSORPTION Vacancy and Net Absorption
TRENDS • Vacancies in Greater Boston’s manufacturing market ended the second quarter at 6.9% as the market absorbed close to 50,000 square feet. Rates continue their general downward trend, and market conditions remain favorable for all industrial product types. Leasing velocity has been steady, with CI Works, Replimune and New England Spas executing large deals most recently. Asking rents in the manufacturing market remain elevated above $9/SF for the third consecutive quarter, and are sitting 6.5% above year-ago levels. • Some large blocks of manufacturing space could hit the market in the near future. Ireland-based Ardagh Group announced plans to close its Milford beer bottling plant and lay off more than 200 workers. Round Hill Investments recently acquired New England Confectionary Company (maker of NECCO wafers) for $17.33 million in a bankruptcy auction. The candy maker already downsized operations at its 829,000-square-foot Revere facility by nearly 150,000 square feet in the third quarter of last year. The new owners are looking to revive the brand, but operations are only slated to continue through the fall. 2013 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 • Coworking and incubating trends have made their way into Greater Boston’s manufacturing industry. CI Works, a manufacturing business incubator based in Amesbury, is opening an additional location at IndusPAD (the former Polartec plant) in Lawrence. The 90,000 square-foot secondary location will allow CI Works to house up to 60 additional companies. Given the growth in hi-tech and other manufacturing operations, the need for this type of collaborative space could expand in the future. • The region’s bustling life science industry continues to drive manufacturing activity in Greater Boston. Sanofi Genzyme is expanding its Framingham footprint, with plans to build a new 72,000-square-foot bio-manufacturing facility. In the first quarter, King Street Properties purchased the former headquarters of the MetroWest Daily News on New York Avenue in Framingham, with plans to renovate the property into a 107,350-square-foot multi-tenant life science facility. Replimune recently leased 63,000 square feet of manufacturing and translational science lab space in this building. Finally, Waters Corp., a scientific equipment maker, plans to add 135,000 square feet to its Taunton facility, which will be operational by 2022. • A handful of transactions took place in the second quarter. Casey & Hayes acquired the 107,869-square-foot 40 Murphy Drive in Avon for $7.4 million or $69/SF, while Invesco Advisors picked up a handful of older industrial/manufacturing assets in Cambridge from the Davis Companies. The Quad, which includes 75 Moulton Street, 10 Wilson Avenue, 40 Smith Place and 75 Smith Pace, is being marketed as transitioning life science campus. Given that the new owner is targeting biotech companies, the portfolio traded for $73 million or $364/SF. 2017 2017 2017 2018 2018 2017 2017 2017 2018 2018
6%
0
-200
4%
600 SF (000s)
10%
-400
400
2%
8%
-600
200
6%
0 -800
0%
2013
2014
2015
2016
2017
2018
-200
Net Absorption
Vacancy
4%
SF (000s)
-400
2%
-600
-800
0%
2013
2014
2015
2016
2017
2018
Net Absorption
Vacancy
ASKING RENT Asking ent
$12
$10
Asking Rent $8
$12
$6
$10
$4
$8
$2
$6
$0
$4
2014
2015
2016
2017
$2
NOTABLE TRANSACTIONS Notable Transactions
$0
2014 CI Works
2015
2016
2017
Replimune
New England Spas
ITG International
US Electrical Services
10K SF
35K SF
60K SF
85K SF
110K SF
Route 495 Northeast Framingham-Natick Route 495 West Route 128 North Urban Core
6
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