B
oston's industrial real estate market cooled in Q2 2025, with leasing activity slowing, vacancies increasing, and asking rents declining. According to Savills Research, the market is shifting towards tenants due to economic uncertainty and rising supply.

    Net absorption remains negative at -200,000 square feet year-to-date, with a focus on lease renewals rather than new tenant move-ins. The vacancy rate rose to 8.1%, a 140-basis-point increase from last year, driven by macroeconomic headwinds and oversupply of new space. As competition among landlords intensifies, average asking rents fell 2.9% quarter-over-quarter to $13.28 per square foot (NNN).

    The Boston region's total industrial inventory reached 334.9 million square feet, up from 323.2 million square feet in Q2 2024. However, new deliveries have slowed significantly, with just 0.8 million square feet completed so far this year compared to 7.0 million square feet delivered by this time last year.

    Construction pipelines have also tightened, with 3.0 million square feet under construction, down from 6.9 million square feet in Q2 2024. Several sizable leases were recorded during the quarter, but a notable tilt towards renewals suggests tenants are opting to stay in place rather than take on new space commitments.

    With vacancies rising and rents softening, the remainder of 2025 is expected to favor occupiers. Tenants entering the market can expect more flexible lease terms and space options, while landlords may need to adjust their pricing strategies in response to shifting demand.