Outlook for industrial real estate market in R.I. for rest of 2025 and start of 2026 is positive - by Julie Freshman and George Paskalis

 

 

As we head into the 4^th quarter of 2025, the Rhode Island industrial market remains healthy with steady demand. Vacancy rates remain below the 7% national average and range between 4% and 5%. Over the past year, vacancies have risen only 0.1% (source: CoStar).

Much of the demand for industrial space continues to come from the logistics/ distribution and manufacturing sectors. There is more availability on the leasing side of the industrial market, while inventory on the sale side is still limited.

Recent lease transactions include 20,194 s/f of industrial space at 24 Maple St. in Warwick that was leased to a third-party logistics company. Notable spaces available for lease include 322,281 s/f of distribution space at 1159-1193 Broad St. in Central Falls; and 47,981 s/f of high bay warehouse space available for lease at 2-4 Energy Way in West Warwick.

On the sale side, 100 Founders Dr. in Woonsocket, totaling 35,000 s/f, sold to a self-storage developer for $3,163,991 in August 2025; a 144,000 s/f industrial building, in the North Central Industrial Park in Lincoln, is under contract; a 160,000 s/f industrial building is under contract with an investor and a 23,868 s/f industrial building located on Niantic Ave. in Providence is also under contract and set to close in November.

While there has not been much new speculative construction of industrial buildings in the Rhode Island market historically, several projects have come to completion with some absorption already realized. Additionally, there are some larger tracts available for build-to-suit opportunities or purchase, including 65 buildable acres in North Smithfield for acquisition with immediate access to Rte. 146.

Another significant proposed development project in Rhode Island is the Comstock Industrial Center, located immediately off of I-295 in western Cranston, which is a 17.3-acre site and is fully approved for up to 270,000 s/f of high bay warehouse or manufacturing uses. This is a rare opportunity to purchase a fully approved site, while the lease rate for this build-to-suit leasing opportunity will be determined based on tenant needs. Projects like these are candidates for the Rhode Island Ready program, which is funding utilized by developers for infrastructure improvements to the sites. 

The Quonset Business Park, ranked among the top 10 best industrial parks in the United States, and one of the top 10 auto importers in North America, is managed by the Quonset Development Corp. (QDC) and has continued to see new construction and expansions in 2025. For example, Anduril Industries, a defense technology company that develops advanced, AI-powered autonomous systems and hardware for military and security applications, has opened a 150,000 s/f facility in Quonset to support the full-rate production of two of their autonomous underwater vehicle (AUV) models. The project involved leasing an existing building (Flex Technology Park Building # 11 which broke ground in 2024 as a shell), and completing an $8.3 million fit-out for manufacturing. The ribbon cutting for this facility was in August 2025. 

Industrial lease rates in Rhode Island have increased over the past few years and are now in the $6-$7 per s/f range, NNN for bulk warehouse space, in the $7-$8 per s/f range for general purpose industrial space, and around $10 per s/f for flex space. Sale prices for 20,000 s/f to 50,000 s/f have continued to range from $65 to as high as $100 per s/f or more depending on quality and location.

The outlook for the industrial real estate market in Rhode Island for the rest of 2025 and beginning of 2026 is positive. Demand for industrial space is expected to remain steady, and vacancy rates are expected to remain low, despite some softening in the leasing market. The low supply and steady demand have continued to keep the sale market strong for empty buildings as well as fully-leased industrial investment opportunities.

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