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January 20, 2021

Report: Central Mass. industrial real estate among region's strongest

Photo | Google WESCO Distribution at 35 Otis St. in Westborough

A series of industrial leases and a major sale in Central Massachusetts are part of a continually strong market in the Boston area, according to a report by the New York City real estate advisory firm Newmark.

Those deals include a previously reported 600,000-square-foot lease by Amazon at 330 and 350 Bartlett St. in Northborough and a lease extension by Nestle Water at 66 Saratoga Blvd. in Devens. WESCO Distribution has also signed a 121,700-square-foot lease at 35 Otis St. in Westborough.

The industrial market also brought one of the largest transactions across the Boston area in the fourth quarter of 2020: a $76-million sale of two adjacent warehouses in Bellingham that have a combined 428,000 square feet. The property was bought by a limited liability corporation registered to John Hancock Real Estate in Boston in a deal closed last October. 

Those deals and others across the Boston area illustrate the strength of the industrial property market, Newmark reported, calling the sector a bright spot in real estate when retail and offices in particular face an uncertain future with coronavirus pandemic-related shifts in how people shop and where they're working.

A vacancy rate of 5.6% in the Boston area is half of what the rate was a decade prior, according to Newmark. More than 2.2 million square feet of space in the industry came online last year, the advisory firm said.

In the area's western suburbs in particular, including Marlborough, Northborough and Westborough, the vacancy rate was 6.3% in the fourth quarter, with more than 1 million square feet added to the area's industrial inventory last year. Growth in the industry extending west from Boston and its more immediate suburbs is pushing demand into Central Massachusetts towns that haven't otherwise seen major developments.

"With dwindling development opportunities, activity continues to expand west towards Worcester, and towns like Boylston, Hopedale, Shrewsbury, Sutton and Uxbridge are receiving an influx of attention," Newmark said.

In Worcester, that industrial growth is centered around Amazon. The e-commerce giant is moving into the former TE Connectivity site on Goddard Memorial Drive, which covers 177,000 square feet. A planned warehouse at the Greendale Mall will span 121,000 square feet.

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