Lunenburg, MA– The Brennan Group (TBG), John M. Corcoran & Company (JMC), and equity partner Berkeley Partners have broken ground and construction is underway on Lunenburg Central, a 372,000 square-foot, Class A High Bay warehouse/distribution facility.
Located at 475 Leominster Shirley Road in Lunenburg, MA, Lunenburg Central is located in the heart of the Route 2 Industrial Corridor in Central Mass. that includes Devens, Littleton, Leominster and Ayer. Lunenburg Central offers quick access to major distribution roadways – three minutes from Route 2, five minutes from I-190 and 11 minutes from I-495 – just 25 miles to Worcester and 43 miles to Boston. Site work commenced in February and the facility is scheduled to be delivered in Q1 2023.
The development of Lunenburg Central is fueled by intense market demand, as quality industrial product is becoming increasingly scarce, particularly large blocks of Class A warehouse space. According to the Q4 Newmark Industrial Report, vacancy rates for industrial properties reached an all-time low of 3.3% in the Greater Boston market at the close of 2021, with vacancies for warehouse/distribution facilities at 2.4% due to increased ecommerce activity. Industrial asking rents rose to $12.27 per square foot NNN in 2021, a 9.7% increase from the previous year.
“With the unprecedented demand for Class A warehouse product in the Metro Boston market, where speed to market for tenants is so critical, the decision to build on spec was a strategic one,” said Tim Brennan, Vice President of TBG. “The competition for land has pushed the development of new industrial product further west, and tenants are responding positively, particularly for locations with convenient highway access, like Lunenburg Central.”
The 372,000 square-foot Class A, tilt-up construction warehouse/distribution facility will feature 36’ clear height, 71 loading docks and 2 drive-in doors, with 402 vehicle parking spaces and 94 trailer/van parking stalls (expandable to 120), as well as build-to-suit office space. Lunenburg Central is sub-dividable to 200,000 square feet, and leasing efforts will be handled exclusively by the Newmark Industrial Leasing and Investment Sales team led by Ed Jarosz. Construction financing was led by the CBRE Capital Markets team through Cambridge Savings Bank.
Designed by GMA Architects, Lunenburg Central will be constructed by ARCO National Construction, the 7th largest design/build general contractor in the U.S., with decades of experience building large industrial developments throughout the country. TBG and JMC equity partner Berkeley Partners’ affiliated entities own and operate nearly 9 million square feet of light industrial properties throughout the U.S., including over two dozen assets in Massachusetts. TBG and JMC have a 20+ plus year history of working together and partnering on various real estate projects.
“We are proud of the team we have assembled for this development, and the Town of Lunenburg has been a terrific partner throughout the entitlement and permitting process,” said Peter Mahoney, Executive Vice President of Development & Acquisitions for JMC. “Lunenburg Central will deliver much needed warehouse/distribution space with a best-in-class facility in a rapidly tightening market.”
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WAYLAND, MA — R.W. Holmes released its first quarter industrial market report, saying the industrial vacancy in the 495 South submarket has hit a historic low in 2022.
“For the first time ever, 495 South industrial market has hit 2.5% vacancy,” says John Eysenbach, Executive Vice President at R.W. Holmes. “This has caused a decrease in deals completed in Q1, not because of a slow-down in demand, but because there is physically nowhere for companies to go.”
Here are some other highlights from the report:
· It’s no shock that the industrial market has been one of the darling asset classes throughout the pandemic. However, while finding space and acquisition opportunities was difficult in 2021, Q1 2022 numbers indicate more difficulties for tenants and owners for the remainder of 2022.
· Users have resorted to looking outside Massachusetts to neighboring Connecticut, Rhode Island, and New Hampshire markets. In many cases, these subsidiary markets are seeing similar supply constraints, and pricing is now almost equivalent to Massachusetts.
· While many sites are under permit or about to begin construction, there is little supply available for immediate occupancy within the next 6-12 months across all user sizes. Notably, users under 25,000 SF are being significantly impacted by the lack of supply, with very few of the industrial projects under construction tailoring to these smaller users.
· The sales market has similarly been impacted. Sales volume is down almost 50% compared to activity in Q1 2021 across Greater Boston. The limited supply has caused sale prices to continue to rise, each quarter bringing a new high watermark. 495 South has hit $200/SF, Rt 128 North has exceeded $300/SF, and Rt 128 South has seen several deals over $250/SF.
“Throughout Greater Boston, tenants with upcoming renewals face a dramatic change in rental rates from what they currently pay in rent. In some cases, we see rates double,” said R.W. Holmes President Garry Holmes. “The North 128 and Rt 3 market has seen significant rent growth, with deals now getting signed at or near $20 NNN for high bay warehouse product. In 2019, those rates averaged $10 NNN.”
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