Limited supply fuels landlord‑friendly conditions in Rhode Island’s industrial market - by Julie Freshman and George Paskalis

 

 

As we enter the spring of 2026, the Rhode Island industrial real estate market stands on stable footing, following several years of resilience fueled by constrained supply, steady demand, and dynamic economic conditions. Industrial vacancy rates are in the 4% to 5% range, as compared with a national average that ranges from approximately 7% to 8%. Compared with national industrial markets which have experienced periods of volatility in the wake of the post-pandemic construction boom, the Rhode Island industrial market continues to operate under its own unique set of dynamics due to a limited development pipeline and a persistent shortage of modern, functional space. These circumstances have positioned the Rhode Island industrial market as a stable, landlord-friendly market heading into the second quarter of 2026, with conditions that continue to be favorable for both owners of well-located properties and investors seeking consistent, dependable cash flow. This tight availability continues to impact leasing activity, with tenants often facing limited options and longer than anticipated search timelines when seeking single-story, efficient facilities.

Recent sale transactions include two industrial buildings (47,000 s/f and 15,500 s/f +/- in size) at 6 & 7 New England Way in Lincoln that sold for $8,121,230 to a manufacturer that purchased the Tanury Industries business and the real estate. An 11,800 s/f building on Park East Dr. in Woonsocket in the Highland Corporate Park sold in February 2026 to an owner/user for their business for $1.15 million and a 41,500 s/f trucking terminal situated on 9.78 acres in Cumberland sold in January 2026 for $2.75 million. Additionally, an 88,000 s/f industrial building at 30 Franklin R. McKay Rd. in Attleboro, Mass. sold to an owner/use for their business use in January 2026 for $7.925 million. Attleboro and North Attleboro, as well as other areas in southeastern Mass. outside of the I-145 belt generally act as a functional extension for the R.I. industrial market. Like northern R.I., the southeastern Mass. region provides ideal access to Boston and Worcester as well as Providence and also provides lower entry points than the Boston area for investors and owner/users.

On the leasing side, a 144,000 s/f industrial building was leased to a Mass. company in January 2026 for expansion purposes and 271,000 s/f of the remaining high bay warehouse space at 145 Commerce Dr. in Warwick was recently leased to a tenant with an immediate need for additional warehouse space for expansion purposes. Additionally, 25,000 s/f of warehouse/manufacturing space was leased at 527 Pleasant St. in Attleboro, Mass. Notable spaces available for lease include 322,281 s/f of distribution space at 1159-1193 Broad St. in Central Falls (also for sale) and 29,100 s/f of Class A fully air conditioned, 48,000 s/f of high bay warehouse space with 14 loading docks available for lease at 4 Energy Way in West Warwick, and clean production and warehouse space (including office) available for lease at 195 Dupont Dr. in Providence.

Regarding new industrial developments outside of Quonset, one notable project is the Comstock Industrial Center, located immediately off of I-295 in western Cranston, which is a fully-approved, two-building, industrial center in Western Cranston Industrial Park. Being developed in two phases, Phase I will conclude with the delivery of a 70,000 s/f high-bay warehouse building, with Phase II commencing as a 200,000 s/f build-to-suit high bay warehouse building. Ownership of the Comstock Industrial Center is open to a sale or a build-to-suit lease. The lease rates for these types of build-to-suit leasing opportunities will be determined based on tenant needs.

In Rhode Island’s Quonset Business Park, officials with the Quonset Development Corp. (QDC) in North Kingstown are proposing to build the second and the largest energy storage facility in R.I. along Callahan Rd. Reportedly, the QDC is working with Green Development LLC, a R.I.-based developer of alternative energy projects (wind, solar, etc.), to build a lithium iron phosphate battery facility that would have the capacity to draw up to 208 megawatts (MW) of power to the electric grid. The first utility-scale battery storage facility in R.I. became operational in 2022 and was built in Pascoag with a capacity of 3 MW. The Pascoag Utility District (PUD) had this battery storage system installed to provide increased reliability for its 5,000 customers during peak electricity demand days, with the help and support from the R.I. Office of Energy Resources, the R.I. Infrastructure Bank and Agilitas Energy.

Looking ahead through the spring and into the remainder of 2026, the outlook for Rhode Island’s industrial market remains positive. We anticipate continued tight vacancy, stable rental rates, and steady leasing activity for functional, ideally-located, “modern” industrial space. The foreseeable variables include economic conditions, particularly the trajectory of interest rates and their impact on business expansion and investment decisions. However, the continued low supply provides a substantial buffer, thereby limiting the likelihood of a substantial increase in vacancy or a severe decline in rents.

Julie Freshman, SIOR, is vice president, and George Paskalis, SIOR, is partner, MG Commercial Real Estate, Providence, R.I.