Rhode Island industrial market holds steady as limited supply supports demand - by Julie Freshman and George Paskalis

 

 

As we enter the fourth quarter of 2026, the Rhode Island industrial real estate market remains relatively stable, despite some softening in leasing activity over the past year. Vacancy rates remain low at approximately 5%, an increase of 0.1 percentage points from a year ago (source: CoStar). While demand has moderated from the higher levels seen in recent years, the limited supply of industrial buildings and lack of new construction continue to support the market. Demand for industrial space continues to come from manufacturing, distribution, logistics and service-related businesses. The market continues to experience steady activity, including several larger lease transactions during the first three quarters of 2026. Rhode Island’s central location within southern New England, access to major highways and proximity to the Boston market continue to make it an attractive location for industrial users.

Several notable industrial lease transactions have taken place in 2026. At 100 Dupont Dr. in Providence, Amazon leased 30,000 s/f of exterior yard/parking space to supplement parking for its distribution center located across the street. In addition, Amazon leased 10,150 s/f of interior flex/industrial space at the property for Rhode Island’s first micro-fulfillment center supporting its new ultrafast “Amazon Now” 30-minute delivery service. Other transactions include 50,000 s/f of warehouse space at 10 New Rd. in East Providence leased to Rand-Whitney and a 144,000 s/f industrial building at 15 Wellington Rd. in Lincoln leased to Work Force, Inc.

While there is more availability on the leasing side of the market, the inventory of industrial properties available for sale remains limited. Demand from both owner-users and investors continues to be strong, particularly for buildings that are well located and have good loading, parking and access to major highways. The limited number of properties available for purchase has helped keep sale prices relatively stable despite higher interest rates and financing costs.

Recent industrial sales include 155 Jefferson Blvd. in Warwick, a 34,846 s/f multi-tenant industrial/sales-service investment property that sold for $3.195 million to a 1031 exchange buyer. Another sale was 1370 Elmwood Ave. in Cranston, a 23,410 s/f industrial building that sold for $1.55 million to an owner-user.

Industrial lease rates in Rhode Island have remained relatively stable over the past year. Bulk warehouse space generally leases for $6.50 to $7.50 per s/f, NNN, while general-purpose industrial space generally leases for $7.50 to $8.50 per s/f, NNN. Flex industrial space generally leases for $10 to $12 per s/f, NNN, depending on the location, condition and amount of office space. Sale prices for industrial buildings generally range from $70 to $100 per s/f or more, depending on the size, condition and location of the property.

There continues to be limited new speculative industrial construction in Rhode Island, although several significant projects are underway or planned. One notable development opportunity is the Comstock Industrial Center, located immediately off I-295 in western Cranston. The 17.3-acre property is fully approved for two industrial buildings totaling 270,000 s/f, consisting of a 200,000 s/f building and a 70,000 s/f building. The property is currently under contract with an investor/developer and represents one of the few larger industrial development opportunities in the state.

The Quonset Business Park continues to see new investment and expansion activity. In May 2026, Cold-Link Logistics broke ground on a 65,000 s/f expansion of its West Davisville facility. The expansion will double the facility’s existing capacity and provide space for 13,000 additional pallet positions for frozen food and beverage storage.

In addition, the Quonset Development Corp. was awarded $11.25 million in federal funding in May 2026 for infrastructure improvements at the Port of Davisville to support submarine shipbuilding, automobile imports and other port operations. Infrastructure work is also taking place to support Electric Boat’s continued expansion associated with its $76.6 billion submarine construction contract with the U.S. Navy. These projects will continue to support industrial growth and employment in the Quonset area.

The outlook for the Rhode Island industrial real estate market heading into 2027 remains positive, with leasing and sale activity expected to remain relatively consistent with 2025. Demand from both owner-users and investors should remain strong, particularly for well-located industrial properties. The limited supply of buildings available for purchase, combined with steady demand and relatively little new construction, should continue to support sale prices and overall market stability.

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