Q2-2018-IndustrialReport

CAPITAL MARKETS STATISTICS Property City/Submarket Mansfield Property

Property

100 Upland Drive 100 Upland Drive Norwood

560 West Street 560 West Street The Seyon Group The Seyon Group $38,500,000 $38,500,000 35 ,469

Property City/Submarket City/Submarket Buyer

Norwood Alexandria Real Estate Equities Alexandria Real Estate Equities 87,250,000 $

City/Submarket Mansfield Buyer

Buyer Price

Buyer Price Price Total SF Price/SF Cap Rate Total SF Price/SF Cap Rate

Price

87,250,000 $ 2 0,430

Total SF Price/SF Cap Rate

Total SF Price/SF Cap Rate

MEDIAN $/SF 200,430 $435 $435 7. 0% 7.30% $95

350,469 $110

SALES VOLUME ($)

NUMBER OF TRANSACTIONS

TOTAL SF

MEDIAN CAP RATE

$110

-

-

$477,935,956

111

3,955,082

6.7%

Sales Volume

Sales Volume SALES VOLUME

$700

TRENDS • Industrial is the new darling of commercial real estate investors both locally and nationally. Record-low vacancies and skyrocketing rents have led to unprecedented levels of activity in Boston’s industrial market in recent years.While sales volume in other asset types has been waning recently, industrial transactions have held steady. More than $900 million in industrial assets changed hands during the first half of 2018, which is on a par with peak-2016 levels as well as last year’s levels. Pricing continues to climb as well, with the median price per square foot reaching $95 in the second quarter.This represents a 5.8% increase from year- ago levels and a 44% increase over the last five years. • Several industrial portfolios traded during the second quarter, with private buyers accounting for 58% of total transaction volume. Jumbo Capital Management purchased the 8-building Xchange at Bedford, anchored by iRobot, for $107.8 million or $223/SF. Rafi Properties acquired the Ames Business Park in Somerville, which included five properties and a small parcel of land, for $88 million or $344/SF. SIP Trust sold a five-property portfolio on Stergis Way in Dedham to the Nordblom Company for $12.6 million or $133/SF. • Flex/R&D properties accounted for more than 60% of the total industrial sales volume in the second quarter.The transactions were evenly dispersed throughout the region, with the sale of the Xchange at Bedford and the Ames Business Park accounting for a large share of this activity. Pricing remains frothy for Flex/R&D properties in Greater Boston, with the median cap rates declining to 6.9% in the first half of 2018. Comparatively, median cap rates for this asset class were close to 10% nearly a decade ago.

$700

$600

$600

$500

$500

$400

$400

$ (Mls)

$300

$ (Mls)

$300

$200

$200

$100

$100

$0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

$0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Median Price/SF Median Price/SF MEDIAN PRICE/SF

$105

$105

$95

$95

$95

$95

$85

$81

$75

$85

$81

$65

$75

$55

$65

$45

$55

$35

$45

$25

$35

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

$25

TOP Q2 / INVESTMENT SALES

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

INDUSTRIAL SALES

Q1 2017

Q2 2017

Q3 2017

Q4 2017

TOTAL

SALES VOLUME ($) Former Reebok HQ Canton The Xchange at Bedford Bedf rd

$374,173,554 560 West Street Mansfield

$453,379,723 Ames Business Park Somerville

00 Upland Drive Norwood

$385,172,081

$433,947,886

$1,646,673,244

# OF TRANSACTIONS

76

78

82

60

296

Spear Street Capital Jumbo Capital Management LLC 107,750, 0 $88,000,000

4,045,511 Alexandria Real Estate Equities

TOTAL SF

4,779,432

6,394,205

4,243,774

19,462,922

Buyer

Buyer

Buyer

The Seyon Group

Buyer

Rafi Properties

MEDIAN $/SF

$75

$59

$103

$86

$90

Price

Price

$87,250,000

Price

$38,500,000

Price

$88,000,000

Total SF

680,000 4 2 662

Total SF

200,430

Total SF

350,469

Total SF

255,795

Price/SF

$129

Price/SF

$435

Price/SF

$110

2 3

Price/SF

$344

Cap Rate

- 6.50%

Cap Rate

7.30%

Cap Rate

-

Cap Rate

-

7