Q1-2018-IndustrialReport

Q1

INDUSTRIAL STATISTICS MANUFACTURING

2018

MANUFACTURING

TOTAL INVENTORY (SF)

TOTAL VACANT (SF)

TOTAL VACANCY RATE

Q1 NET ABSORPTION (SF)

YTD NET ABSORPTION (SF)

Vacancy and Net Absorption

TOTAL

34,953,695

2,456,778

7.0%

(60,529)

(60,529)

600

10%

400

2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017

8%

200

VACANCY & NET ABSORPTION Vacancy and Net Absorption 0

TRENDS • Vacancies in Greater Boston’s Manufacturing market inched up by ten basis points during the first quarter of 2018. Move-outs from Zoots Cleaners in Brockton, General Mills in Methuen, and United HVAC in Hingham contributed to this quarter’s negative absorption, while an owner-user sale at 29 Everett Street in Holliston took 53,510 square feet off the market. With that said, rates are still 100 basis points below year-ago levels, and market conditions remain favorable for all industrial product types. Moreover, average asking rents continue to climb; surpassing $8.50/ SF in the first quarter. • Manufacturing sites are finding new life as self-storage facilities in Greater Boston. In the fourth quarter, a Utah-based self-storage company purchased 120 N. Main Street in Brockton with plans to convert the manufacturing facility into a 75,000-square-foot self-storage facility. Following the sale the previous owner-user, MicroWire Products Inc., shifted its manufacturing operations and relocated into 18,000 square feet at 5 Mear Road in Holbrook. In Framingham, Eastland Partners acquired a vacant manufacturing facility at 120 Leland Street with plans to also construct a new self- storage facility. Self-storage assets have performed exceptionally well this cycle as the heated housing market, downsizing Baby Boomers, and urban population growth have propped up demand. If this sector continues to perform well, the region could see more investment in self-storage facilities. • Some large blocks of manufacturing space could hit the market in the coming quarters. Ireland-based,Ardagh Group, announced plans to close its Milford beer bottling plant and lay off more than 200 workers. New England Confectionary Company (maker of NECCO wafers) is facing bankruptcy, which could result in the closure of the firm’s 829,000-square-foot Revere facility. The candy maker already downsized its operations by nearly 150,000 square feet in the third quarter of last year. • 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. King Street Properties recently purchased the former headquarters of the MetroWest Daily News on New York Avenue in Framingham. The life science developer/owner plans to renovate the property into a 107,350-square-foot multi-tenant life science facility. Finally, Waters Corp., a scientific equipment maker, plans to add 135,000 square feet to its Taunton facility, which will be operational by 2022. • There is currently several hundred thousand square feet of manufacturing space under construction, with 100% of it preleased. Most notably, Pfizer is constructing a 175,000-square-foot facility at its campus on Burtt Road in Andover and Insulet is redeveloping 100 Nagog Park into a 325,000 square foot facility. 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 2017 2017 2018 2017 2017 2018

6%

-200

600

10%

4%

SF (000s)

-4 0

400

8%

2%

-6 0

200

6%

0 -8 0

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

$10

$8

Asking Rent $6

$10

$4

$8

Asking Rent ($/SF) $6 $0 $2

tion 529)

2014

2015

2016

2017

$8.54

$4

NOTABLE TRANSACTIONS Notable Transactions

$2

Ho Toy Noodle

$0

Mystic Brewery 2014

2015

2016

2017

Mass Electric Construction

A & M Welding Fabrications

Millenium Printing

10K SF

35K SF

60K SF

85K SF

110K SF

Route 128 South Urban Core Route 128 West

6

aners in Brockton, General