Inflation and rapidly increasing interest rates continue to rule the economic headlines which has led to a weakened outlook for many.
SUPPLY AND DEMAND:
The Rhode Island (RI) market remains quite active, especially on the sales side. There is a low supply of single-story, well-located facilities with acceptable ceiling heights. Demand for these types of facilities seems to be increasing and will continue into Q3 23. Companies that are looking to grow are leasing short-term until they can find a facility that will serve their needs long-term.
As always, there is a supply and demand issue in the RI industrial market. There have been few quality facilities that have come on the market recently and activity has been brisk. Although some properties were leased or sold, substandard space (mill space) on multiple levels remains available but is difficult to lease. Activity will continue especially if new products continue to come to market. The RI industrial market does not have the large peaks and valleys that most primary markets experience with both good and bad economic times.
PRICING: Asking Rents Remain Stagnant
The Providence industrial market still maintains asking rental rates in the $6.50 to $7.50 per square foot (psf) triple net range for facilities in the 20,000 to 50,000 square-foot (sf) range ‘as-is’. Now landlords are achieving higher rents due to the lack of products and increased activity. Asking rent for facilities in the 60,000 to 80,000 sf range tends to remain in the $5.00 to $6.00 psf triple net range. Buildings over 100,000 sf in size command rents in the mid to upper $3.00 to $4.00 psf triple net range.