Categories: Rhode Island Business NewsRhode Island News

Rhode Island’s Industrial Market Shows Resilience Amid Nationwide Trends

An overview of Rhode Island's thriving industrial sector, highlighting new developments and active logistics.

News Summary

Despite a national decline in logistics companies occupying industrial spaces, Rhode Island is seeing stability in its industrial market. The state reports flat vacancy rates and positive net absorption, indicating robust demand. New developments, such as the Comstock Industrial Center and opportunities for build-to-suit projects, illustrate a healthy market contrasted with larger cities facing oversupply. Recent leasing transactions further demonstrate ongoing interest in industrial spaces, as lease rates remain competitive. Overall, Rhode Island’s industrial sector is poised for continued growth, attracting investors despite challenges in other markets.

Rhode Island – Despite a nationwide trend of logistics companies vacating more industrial space than they occupy, Rhode Island’s industrial market has shown remarkable stability. As of the second quarter of 2025, the state has reported flat vacancy rates alongside positive net absorption, reflecting a resilient market with consistent demand.

Positive net absorption indicates that more industrial space is being leased or occupied than is being vacated. This is a significant sign of a healthy market, particularly when many larger logistics markets such as the Inland Empire, East Bay, Los Angeles, Seattle, Chicago, Atlanta, Baltimore, and Harrisburg are experiencing negative absorption due to oversupply and decreased demand.

In Rhode Island, the industrial sector is not facing the same challenges. The market remains appealing, with lease rates being more affordable compared to major metropolitan areas across the country. Recent reports suggest that the demand for industrial space continues to thrive, as historical patterns of speculative construction begin to change with various new projects either completed or underway.

Significant new developments include the Comstock Industrial Center in western Cranston, designed in two phases. The first phase will contain a 70,000 square foot high-bay warehouse, while the second phase will introduce a substantial 200,000 square foot build-to-suit warehouse. Additionally, there are available build-to-suit opportunities, such as a 65-acre site in North Smithfield, which provides immediate access to Route 146.

Lease rates for these new developments will be determined based on the specific needs of potential tenants, who may also be candidates for the RIReady program, aimed at funding necessary infrastructure improvements. However, as vacancies remain low, the number of buildings available for sale or lease has decreased. The high interest rates currently affecting buyers’ purchasing power have led some businesses to opt for leasing arrangements instead of purchasing property outright.

Recent leasing activities highlight the ongoing demand for industrial space. A notable lease transaction includes a global automation company securing 54,146 square feet at 100 Higginson Ave. in Lincoln. Additionally, a third-party logistics company has taken on a space of 39,000 square feet at 1950 South County Trail in East Greenwich. Other considerable industrial spaces available for lease include:

150,000 square foot distribution building at 100 Maple Ridge Dr., Cumberland
325,000 square foot distribution space at 1159-1193 Broad St., Central Falls
270,000 square foot distribution space at 145 Commerce Dr., Warwick

Recent industrial property sales further indicate a positive trend in the sector. The former Ennovi factory located at 231 Ferris Ave. in East Providence sold for $7 million in June 2025, encompassing 120,000 square feet on 12.8 acres. Similarly, the former Taylor Box building at 239 Child St. in Warren sold for $2.65 million, featuring a 51,000 square foot facility.

Expected lease rates for industrial spaces in Rhode Island are projected between $6 and $7 per square foot for bulk warehouse spaces, $7 to $8.50 per square foot for general purpose industrial spaces, and $10 to $12 per square foot for flex spaces. Meanwhile, prices for smaller industrial spaces (20,000 to 50,000 square feet) are estimated to range from $65 to $100 per square foot, signaling ongoing interest from investors.

As industrial sector stability becomes evident, compared to the less predictable retail and office markets, investors are finding consistent opportunities in Rhode Island. The outlook for the industrial real estate market in the latter half of 2025 remains positive, with expectations for sustained demand and low vacancy rates bolstered by new projects, including the 160,000 square foot Blackstone Distribution Center in Pawtucket. This new project marks Rhode Island’s inaugural urban speculative industrial site, designed to enhance last-mile logistics with modern features and adequate truck maneuvering space.

In the broader context, Providence officials are currently deliberating a proposed increase in the property tax levy by 7.5% for fiscal year 2026, which requires legislative approval to surpass Rhode Island’s 4% tax cap. This proposal has attracted mixed responses, with concerns raised regarding its potential effects on smaller multifamily properties. The city’s budget for the upcoming fiscal year is significantly dependent on the outcome of this levy increase, which is vital to maintaining city services amid challenges posed by rising real estate prices.