News & Transactions

ECONOMY OR SUPPLY: Interest rates continue to rule headlines

Although tariffs remain a concern, inflation has remained relatively stable. Interest rates remain high, but outlook seems positive as many predict a Fed cut soon.

SUPPLY OR DEMAND: Sales Side remains Active

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 appears to be increasing and is expected to continue into Q3 2025. Companies that are looking to grow are leasing short-term facilities until they can find a long-term solution that will meet their needs.

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 busy. 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 on the 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 bump up

The Providence industrial market has seen a bump in asking rents. Asking rents for space in the 20,000 – 50,000 square foot (sf) range are $7.50 - $8.50 per square foot NNN for ‘as is’ condition. High bay warehouse space is achieving rents in the higher end of the range due to the lack of product in our market. Larger spaces in the 60,000 – 100,000 sf range with high ceiling height (24’ – 40’ clear) can ask and achieve similar rents as a smaller space. In the past, there was quite a bit of fluctuation in rents based on square footage. Overall, the market continues to struggle with a supply of quality products. One speculative building has been constructed in the RI market in the past 40 years. Northpoint built a 500,000-sf high bay warehouse in Warwick, RI, directly across from Rhode Island TF Green International Airport; 266,000 sf remains on the market for lease. Construction was completed in Q1 2023. Higher rents than the market is used to explain the slow absorption.

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