Q1 128 North-Route 3 Industrial Report

321 Commonwealth Rd, Wayland, MA 01778
Phone: 508-655-5626
Web : www.rwholmes.com

Q1 2021 REPORT

128 NORTH/ROUTE 3 NORTH INDUSTRIAL

Q1 2021 128 NORTH/ROUTE 3 NORTH
INDUSTRIAL REPORT

MARKET RECAP AND HEALTH

• Sales volume for industrial/flex buildings in Q1 was at an all time high for the decade at $1.2 Billion. That figure
nearly doubled 2019 Q4’s record of $629,000,000.

• While vacancy was up slightly in Q1, average rents have continued to climb to about $11.89/SF (net) on average.
Leasing activity remains steady.

• Average sale price per square foot was also at a 10 year high of $124/SF across the entire market.

94,500,400 5.7% $11.89/SF NNN 1,000,000
TOTAL SQUARE FEET VACANCY RATE AVERAGE RATE
SQUARE FEET UNDER
CONSTRUCTION

Q1 Transaction Breakdown Q1 Transactions by Size

Q1 2021

MARKET ACTIVITY: SALES AND LEASING

RECENT INSTITUTIONAL
SALES BY BUYER

Bain Capital & Oliver Street Capital Berkeley Partners
21 ,42 ,65, 80, 80R Industrial Way, 1 23 Rainin Rd, Woburn, 33 Manning Rd,
Progress Way, and 844 Woburn Street
Billerica, 10 Technology Dr, Peabody
687,000 SF total ($224/SF) 163,000 SF Total ($171.80/SF)

Rhino Capital BentalGreenOak Northbridge Partners
3 & 6 Riverside, Andover, 1 Industrial Dr, 29,16, 18 Esquire Rd, Billerica and 200, 500, 150 Flagship Dr, North Andover,

Danvers 600, 800 Research Drive, Wilmington 146 Dascomb Rd, Andover
216,000 SF Total ($95.37/SF) 572,000 SF Total ($233/SF) 264,000 SF Total ($174.17/SF)

RECENT LEASING ACTIVITY

613 Main St 35 High St
Wilmington Billerica

Tenants: Tenant:
Lowes The Portland
178,000 SF
Homans Associates Group
202,435 SF 35,000 SF

32 Cabot Rd 64 Industrial Pkwy
Woburn Woburn

Tenant: Tenant:
Continuus Fusion Optix
Pharmaceuticals
49,000 SF 20,000 SF

Q1 2021

WHAT WE WILL BE WATCHING

• Individual buildings traded on average $50/PSF lower than portfolios in Q1. We expect this
gap to narrow as recent record trades will force valuations higher.

• The fallout from record sales numbers will continue the rent growth we have witnessed over
the past 3 years in the industrial flex market. Leasing activity dipped slightly in Q1 but will
likely pick back up with renewed life science GMP demand paired with E-commerce demand
remaining steady.

• The elimination of supply that was fueled by 40B to convert industrial property to multi-
family real estate for the better part of the decade seems to have stopped due to COVID-19.
While it does not appear that trend will return soon, it does bode well for supply long term
that demand from investors looking to maintain and improve industrial assets is very strong
presently.

• Looking toward the 495 belt and Route 3 North, a trend towards adaptive re-use or razing of
underperforming office product into industrial/flex space appears to be on the rise.
We expect supply to increase slightly in areas further north and west of Boston.

PRESENTED BY

David Gilkie Mike Ogasapian
Senior Vice President Assistant Vice President

508.650.9905 508.651.9021
[email protected] [email protected]

321 Commonwealth Rd, Wayland, MA 01778 | Phone: 508-655-5626 | www.rwholmes.com