Supply & Construction
Boston’s industrial vacancy declined for the first time since Q4 2022, dropping 30 basis points (bps) to 11.8%, though remaining 100 bps higher year-over-year (YOY). Annual improvements were concentrated in the West cluster where vacancy declined 190 bps, while the North and South clusters each recorded increases of at least 100 bps. At 8.1%, the West remained the market’s tightest cluster and the only one with vacancy below 10.0%, measuring 370 bps below the market average.
The Q3 completion of Home Depot’s 604,800-square-foot (sf) build-to-suit development at 65 Theodore Drive was the market’s largest delivery year-to-date (YTD), bringing completions to 2.4 million square feet (msf). Eight assets totaling 1.3 msf remained under construction, with only one anticipated to deliver before year-end: a speculative 180,000-sf warehouse/distribution (W/D) asset at 40 United Drive.
Demand & Pricing
Despite Q3 leasing slowing to 1.2 msf, YTD activity reached 5.6 msf, up 72.8% YOY and already exceeding the full-year 2025 total by 558,000 sf. Two leases exceeding 100,000 sf were signed in Q3, following 10 during the first half of the year. The 12 large-block transactions YTD more than doubled the five recorded through Q3 2025, signaling renewed demand for larger spaces. Renewal activity was also robust at 1.6 msf, the highest quarterly total in 2026 to-date, led by BlueTriton Brands’ 500,000-sf renewal at 66 Saratoga Boulevard, the market’s largest in more than a year.
Move-ins outpaced departures in Q3, generating 1.4 msf of positive direct net absorption, the highest quarterly total since Q4 2022. Three tenants occupying spaces of 450,000 sf or larger contributed to the quarterly gains.
Direct average asking rents climbed 9.6% YOY to a record $16.15 per square foot (psf), with all clusters recording annual growth. The North led the increase, with all three submarkets posting gains exceeding $1.00 psf. Asking rents in the North rose $3.76 psf to $20.39 psf, nearly $4.25 psf above the market average.
Sales
During Q3, 17 industrial properties totaling 1.8 msf traded. The largest transaction was LaSalle Investment Management’s $90.3 million acquisition of the 396,375-sf W/D asset at 80 Pine Hill Drive from NorthBridge at $228 psf.
