Categories: Rhode Island Business NewsRhode Island News

Rhode Island’s Industrial Real Estate Market Sees Growth

Aerial view capturing the thriving industrial scene in Rhode Island.

News Summary

Rhode Island’s industrial real estate market is currently thriving, with low vacancy rates between 4% and 5%, outpacing the national average. Driven by sectors like e-commerce and logistics, demand for larger spaces is rising, despite recent tariff impacts. Major transactions, new developments, and the RI Ready program show strong potential for continued growth, complemented by significant job creation, such as the seaglider facility by REGENT Craft. The overall outlook for 2025 remains optimistic despite some market uncertainties.

Rhode Island’s industrial real estate market is showing robust growth, with vacancy rates remaining low, between 4% to 5%, significantly outpacing the national average of approximately 7%. This stability in occupancy appears to reflect a healthy demand generated by critical sectors such as e-commerce, logistics, manufacturing, and life sciences.

As of mid-2025, the surge in demand has prompted third-party logistics (3PL) providers and retailers to actively seek larger facilities equipped with modern amenities to accommodate the ever-increasing needs of e-commerce. However, recent tariff actions and shifts in policy from the current administration have brought about a level of volatility in the industrial sector, influencing leasing decisions, construction costs, and overall investment strategies within the market.

At the Society of Industrial and Office Realtors (SIOR) conference held in Las Vegas from May 6 to 9, 2025, discussions regarding the impact of tariffs on the economy were prevalent. While these tariffs have temporarily dampened leasing activity, brokers are reporting a rise in interest from international companies from regions such as Mexico, Canada, Europe, and Asia. These companies are looking to establish factories within the United States, driven by the anticipated long-term domestic demand in manufacturing and logistics.

A notable transaction in the market includes the leasing of 41,385 square feet of industrial space at 1 Albion Rd, Lincoln, to a Swiss-American medical device company specializing in respiratory care. This deal exemplifies the trend where renovations from existing office space are being utilized to accommodate operational needs.

In terms of property sales, several significant transactions occurred in April 2025. A 22,500 square foot industrial building located at 666 Park East Dr. was sold for $2.025 million, while a larger 54,864 square foot building at 862 Waterman Avenue changed hands for $4 million. Additional large industrial buildings are currently under contract in various locations, including East Providence, Warren, and Woonsocket.

The industrial landscape in Rhode Island is also seeing new developments; the Comstock Industrial Center has been proposed to include a two-building project off I-295 in Cranston. This development is set to roll out in phases, beginning with the construction of a 70,000 square foot high-bay warehouse, followed by a 200,000 square foot build-to-suit facility.

In addition, the Rhode Island Ready (RI Ready) program is making strides to create a statewide inventory of pre-permitted sites for industrial development. Presently, the program includes 21 sites totaling 5.5 million square feet earmarked for such purposes. Quonset Business Park, a crucial industrial hub, is nearing its capacity with just 58 acres remaining for development and the largest parcel able to support projects up to 200,000 square feet.

The industrial lease rates in Rhode Island are currently fluctuating, ranging from $6 to $7 per square foot for bulk warehouse spaces and reaching up to $10 for flex spaces. Sale prices per square foot can vary significantly based on the size and precise location of the properties.

Despite potential leasing market softening due to ongoing tariff uncertainties, the outlook for Rhode Island’s industrial real estate market for 2025 remains optimistic. Expectation of steady demand coupled with low vacancy rates is anticipated to sustain growth in this sector.

Further contributing to this positive forecast is the recent groundbreaking of a 255,000 square foot seaglider manufacturing facility by REGENT Craft at the Quonset Development Corporation site. This project is projected to create between 300 and 750 jobs over the next decade, reinforcing Rhode Island’s commitment to fostering growth in the industrial sector.