Recent news: Several large transactions have taken place recently: pet supply retailer PetEdge signed a new 215,000-square-foot lease in Billerica, Dealer Tire took approximately 100,000 square feet in Mansfield, and Harvey Industries signed a new lease for 55,000 square feet in Southborough. A number of new prospects are also looking to capitalize on aggressive rental rates. These include Sonepar, in the market for 180,000 square feet; Horizon Beverage, in the market for 400,000 square feet; and New England Sheets and Horn Packaging, each in the market for 150,000 square feet. Major industrial users leaving the market include General Motors which will vacate 400,000 square feet in Norton and Adidas/Reebok which will vacate an additional 500,000 square feet in Lancaster and Stoughton.
Submarket update: Overall, the Metro South industrial market has been hit the hardest, recording its worst metrics in 10 years and posting a 22 percent availability rate at the close of 2009. The strong-performing
Metro West Market, which saw nominal adjustments in vacancy rates, absorption and average asking rents, managed to capture several large transactions in 2009, including Genzyme, Verizon and FedEx Smart Post. The Metro North Market posted lower vacancy and lower tenant velocity.
Predictions for the next year: With a number of new leasing prospects in the market, rents are expected to bottom out in 2010 and will remain flat throughout the year. Users are being lured back into the market with aggressive sale prices and competitive offerings of distressed bank-owned assets. The majority of market activity will come from users between 50,000 and 100,000 square feet and several troubled assets will come to market with the expectation of closure by year’s end.
— Bob Gibson, executive vice president and partner with Boston-based
CB Richard Ellis/New England.