Boston, October 11, 2025
News Summary
Greater Boston’s industrial real estate market demonstrated resilience in Q3, with a total leasing volume of approximately 3.02 million square feet, largely driven by renewals. This trend indicates tenant preferences for stability amidst a volatile environment, leading to a decrease in net absorption and a slight increase in availability rates. Average asking rents remained stable, while institutional investments continued to trend positively in the area. The market outlook remains cautiously optimistic as demand dynamics shift.
Boston — Greater Boston’s industrial real estate market remained resilient in Q3 2025, supported by steady leasing activity that was largely driven by renewals and by a limited new construction pipeline that kept asking rents stable.
Key facts — Q3 2025
Total leasing volume for the quarter was approximately 3.02 million square feet, with renewals accounting for nearly 60% of that activity. The increase in renewals is attributed to tenant preferences for stability and cost avoidance, with tenants opting to renew leases to avoid relocation costs. Early renewals have become more common as companies seek security in a volatile market environment.
The quarterly net absorption was -507,414 square feet, while the year-to-date net absorption was -280,779 square feet. The net negative absorption reflects, in part, the return of larger spaces from expiring COVID-era leases, which has added pressure to the market and fueled overall availability.
The return of larger spaces from expiring COVID-era leases has added pressure to the market, fueling overall availability, which rose by 20 basis points to 9.8%. At the same time, vacancy rates slightly declined by 10 basis points to 7.6%, aided by limited new construction and several large vacant blocks being leased.
Average asking rents remained stable at $15.20 per square foot NNN, dropping only $0.06 compared to the previous quarter. Speculative development is slowing, and there is a narrower construction pipeline, leading to an expectation of stable rents into 2026. Increased demand, particularly from third-party logistics (3PL) providers, could pressure lease rates upward over the next 12 to 18 months.
Market expectations and influences
Despite softened market fundamentals, CBRE expects the Boston industrial market to remain stable through the end of 2025, contingent on demand from larger users. Broader factors such as interest rate changes, global trade dynamics, and emerging technologies like AI and robotics are anticipated to continue influencing market behavior.
Construction and pipeline
At the close of 2024, nearly 1.9 million square feet of industrial space was under construction in the Boston market, indicating a lower supply pipeline compared to other markets. The narrower pipeline compared with many other U.S. markets has been a contributing factor to limited upward pressure on rents in the near term.
Leasing dynamics
Renewals accounted for a substantial share of leasing activity as tenants prioritized stability and cost control. Early renewals became more prevalent as firms sought to lock in space and avoid potential relocation or fit-out expenses in a market with variable demand.
Notable transactions
Blackstone acquired an 87,000-square-foot, Class A industrial property in Saugus, MA, for $58.5 million, securing a $42 million acquisition loan from AIG Insurance Co. The property was developed by Hilco Real Estate, featuring 14 dock-high doors, 162 vehicle parking spaces, and designed as a UPS distribution center, currently fully occupied. The deal underscores continued institutional investment interest in Boston-area industrial assets.
Rockpoint purchased a distribution center for $120 million, marking the largest Central Massachusetts property transaction since 2020. The Rockpoint property incorporates roughly 646,000 square feet of class A industrial space, located on a 70-acre site with flexible configurations for single and multi-tenant use. Approximately 73% of the Rockpoint property is leased with a long-term lease established in 2023. The unleased space remains in shell condition with outdoor storage options.
Implications for occupiers and owners
Occupiers weighing relocation versus renewal have tended to favor renewals to avoid fit-out and moving costs, reducing near-term demand for new requirements. Owners and developers face a slower speculative development environment, while institutional capital continues to target well-positioned Class A assets with stable cash flows.
Bottom line
The Boston industrial market showed resilience in Q3 2025 through a combination of strong renewal activity, a restrained new-construction pipeline, and continued institutional interest in Class A assets. Market stability through the end of 2025 is expected if demand from larger users persists, while ongoing macroeconomic and technology trends will remain key variables to monitor.
FAQ
What was the total leasing volume in Q3 2025?
Total leasing volume for the quarter was approximately 3.02 million square feet, with renewals accounting for nearly 60% of that activity.
Why did renewals increase?
The increase in renewals is attributed to tenant preferences for stability and cost avoidance, with tenants opting to renew leases to avoid relocation costs.
Are early renewals common?
Early renewals have become more common as companies seek security in a volatile market environment.
What was the net absorption for the quarter and year-to-date?
The quarterly net absorption was -507,414 square feet, while the year-to-date net absorption was -280,779 square feet.
How did availability and vacancy change?
The return of larger spaces from expiring COVID-era leases has added pressure to the market, fueling overall availability, which rose by 20 basis points to 9.8%.
Vacancy rates slightly declined by 10 basis points to 7.6%, aided by limited new construction and several large vacant blocks being leased.
What happened to asking rents?
Average asking rents remained stable at $15.20 per square foot NNN, dropping only $0.06 compared to the previous quarter.
What is the outlook for development and rents?
Speculative development is slowing, and there is a narrower construction pipeline, leading to an expectation of stable rents into 2026.
Could lease rates rise?
Increased demand, particularly from third-party logistics (3PL) providers, could pressure lease rates upward over the next 12 to 18 months.
What is CBRE’s outlook?
Despite softened market fundamentals, CBRE expects the Boston industrial market to remain stable through the end of 2025, contingent on demand from larger users.
What broader factors will influence the market?
Broader factors such as interest rate changes, global trade dynamics, and emerging technologies like AI and robotics are anticipated to continue influencing market behavior.
What notable transactions occurred?
Blackstone acquired an 87,000-square-foot, Class A industrial property in Saugus, MA, for $58.5 million, securing a $42 million acquisition loan from AIG Insurance Co.
The property was developed by Hilco Real Estate, featuring 14 dock-high doors, 162 vehicle parking spaces, and designed as a UPS distribution center, currently fully occupied.
Rockpoint purchased a distribution center for $120 million, marking the largest Central Massachusetts property transaction since 2020.
The Rockpoint property incorporates roughly 646,000 square feet of class A industrial space, located on a 70-acre site with flexible configurations for single and multi-tenant use.
Approximately 73% of the Rockpoint property is leased with a long-term lease established in 2023. The unleased space remains in shell condition with outdoor storage options.
What is happening with construction in the Boston market?
At the close of 2024, nearly 1.9 million square feet of industrial space was under construction in the Boston market, indicating a lower supply pipeline compared to other markets.
Quick reference table
| Metric | Value / Detail |
|---|---|
| Total leasing volume (Q3 2025) | Approximately 3.02 million square feet (renewals nearly 60%) |
| Quarterly net absorption | -507,414 square feet |
| Year-to-date net absorption | -280,779 square feet |
| Availability | 9.8% (rose 20 basis points) |
| Vacancy | 7.6% (declined 10 basis points) |
| Average asking rent | $15.20 per square foot NNN (down $0.06 QoQ) |
| Construction pipeline (end of 2024) | Nearly 1.9 million square feet under construction |
| Notable transactions | Blackstone: 87,000 sq ft in Saugus, MA — $58.5M; Rockpoint: ~646,000 sq ft — $120M |
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Additional Resources
- Boston Real Estate Times: Boston’s Industrial Real Estate Market Holds Steady
- Wikipedia: Industrial Real Estate
- Commercial Search: Blackstone Buys Boston Facility
- Google Search: Boston industrial real estate
- Crain’s Cleveland: Boston REIT Plymouth Buys Industrial Space
- Encyclopedia Britannica: Real Estate
- Commercial Cafe: Rockpoint Buys Distribution Center in Greater Boston
- Google News: Industrial Real Estate Boston
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