Rhode Island’s Industrial Real Estate Market Shows Resilience

Categories: Rhode Island Business NewsRhode Island News

An active industrial warehouse in Rhode Island depicting the thriving real estate market.

News Summary

The industrial real estate market in Rhode Island remains robust with low vacancy rates of 4-5%, driven by high demand from e-commerce, logistics, and manufacturing sectors. Despite challenges from recent tariff actions, activity is strong with significant lease transactions and new developments underway. Expectation for future demand remains optimistic as companies look to expand in the U.S., bolstering local industrial markets. The outlook is positive heading into summer 2025, though potential softening may occur due to ongoing tariff-related uncertainties.

Rhode Island is currently witnessing a robust industrial real estate market characterized by low vacancy rates and persistent demand, despite the challenges posed by recent tariff actions. As of mid-2025, vacancy rates for modern, single-story industrial buildings in the state range from 4% to 5%, significantly lower than the national average of approximately 7%.

A variety of sectors are driving the demand within the industrial real estate space, including e-commerce, logistics, manufacturing, and life sciences/pharmaceuticals. This ongoing need for industrial space is compounded by limited new construction, which has only intensified market tightness. Demand is especially high from retailers and third-party logistics firms, which are increasingly looking for larger facilities that include modern amenities suitable for e-commerce fulfillment.

The Rhode Island industrial real estate market is also facing volatility due to recent tariff actions and policy changes from the current administration. Such factors are influencing leasing decisions, construction costs, and investment strategies across the board. The effects of these tariff actions were a central topic of discussion at the recent Society of Industrial and Office Realtors (SIOR) conference held in Las Vegas from May 6-9.

Notably, industry experts maintain a cautious optimism that these tariffs may eventually lead to increased long-term demand for industrial space. The expectation is that companies from regions including Mexico, Canada, Europe, and Asia will seek to establish manufacturing facilities within the United States, thereby boosting local industrial markets.

Rhode Island’s recent lease transactions illustrate the active market conditions. A significant lease was signed for 41,385 sq. ft. at 1 Albion Rd. in Lincoln, occupied by a Swiss-American medical device company that is expanding its operations. In the sales arena, a 22,500 sq. ft. industrial property at 666 Park East Dr., Woonsocket was sold for $2.025 million in April 2025, while a 54,864 sq. ft. building at 862 Waterman Avenue, East Providence fetched $4 million during the same timeframe.

Several large industrial buildings are under contract within the state, indicating strong market activity. These include:

120,000 sq. ft. building at 231 Ferris Ave. in East Providence
51,000 sq. ft. building at 239 Child St. in Warren
35,000 sq. ft. building at 100 Founders Dr. in Woonsocket
23,000 sq. ft. building at 88 Niantic Ave. in Providence
20,000 sq. ft. multi-tenant property at 400 Frenchtown Rd. in East Greenwich

A notable development endeavor, the Comstock Industrial Center in western Cranston, is moving forward with plans for two phases, including a 70,000 sq. ft. warehouse and an additional 200,000 sq. ft. build-to-suit warehouse. Additionally, the Rhode Island Ready (RI Ready) program is actively promoting the readiness of pre-permitted sites for industrial use to expedite development processes.

While the Quonset Business Park has limited available space, currently only 58 acres remain for development, providing an opportunity for one large parcel that could accommodate up to 200,000 sq. ft.. The outlook for Rhode Island’s industrial real estate remains largely positive as the market heads into the summer of 2025, albeit with potential softening expected within the leasing market due to tariff-related uncertainties.

Despite these challenges, industry authorities remain confident in the resilience of the industrial sector, particularly in manufacturing and logistics, as they anticipate continued demand in the face of evolving market conditions.