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Small Bay Industrial: From Hidden Gem to High-Demand Investment

June 2, 2025
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Small Bay Industrial: From Hidden Gem to High-Demand Investment

Once overlooked by institutional buyers, small bay industrial properties are now among the most sought-after asset types in the Greater Boston Suburban commercial real estate market. These flexible, functional spaces—typically ranging from 3,000 to 30,000 square feet—have become a cornerstone for both local manufacturers and service-based businesses.

What Is Small Bay Industrial?

“Small bay industrial” refers to multi-tenant or single-user light industrial buildings that feature drive-in or small dock loading, warehouse with minimal office, and flexible configurations. These assets are ideal for tradespeople, e-commerce distributors, specialty fabricators, local contractors, and emerging technology manufacturers who need functional space without the overhead of big-box logistics or Class A office environments.

Why Investors Are Paying Attention

For years, small bay industrial was considered a niche asset class—important locally but often overlooked in broader investment strategies. That’s changed dramatically. In today’s environment of limited industrial supply, rising construction costs, and evolving user demand, small bay properties offer several competitive advantages:

  • Low Total Development Cost – Simpler building systems, smaller footprints, and flexible zoning reduce development and retrofit costs.
  • Diverse Tenant Base – These spaces appeal to a wide range of users, from HVAC and electrical contractors to biotech startups and light assembly firms.
  • Strong Lease Momentum – High demand and low vacancy drive shorter lease-up times and fewer concessions for landlords.

Market Trends in Boston’s North Suburbs

In markets like Woburn/Wilmington, Billerica, and Danvers/Peabody, small bay industrial space is commanding increased attention from owner-users and private investors alike. With limited new inventory and many older assets trading off-market, competition for well-located, well-maintained properties is intense.

Cap rates remain competitive, and value-add opportunities—such as upgrading HVAC, adding drive-in doors, or subdividing larger bays—can yield significant returns. Meanwhile, local zoning support for light industrial and service-commercial uses continues to enhance this asset class’s viability.

Case Study: Recent Sale Demonstrates Strong Market Interest

One recent example is a small bay industrial sale completed by Nordlund Associates, located in the heart of a prime Route 128 corridor submarket. The property offered:

  • Multiple drive-in bays (Drive thru the building as well)
  • Clean warehouse with minimal office build-out
  • Ample parking and room for expansion
  • Zoning flexibility for light industrial, contractor use, and specialty assembly

Well-positioned, functional assets like this are attracting qualified buyers at premium pricing—often with limited days on market.

Looking Ahead

Whether you’re a business owner seeking practical space, or an investor exploring income-producing industrial properties north of Boston, small bay industrial is no longer flying under the radar. It’s a strategic investment choice—and still offers entry points for those ready to act quickly.

Interested in Buying, Selling, or Leasing Industrial Bay Space?

At Nordlund Associates, Inc., we specialize in helping clients identify and capitalize on flexible-use industrial opportunities throughout the North Shore and North Suburban Boston market.

📞 Contact us today to learn more about current availabilities or to schedule a confidential property consultation.


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