Emerging Manufacturing Sector Sparks New Development In Boston's Suburbs

Growing companies in the advanced manufacturing and green tech sectors are planting their flags in Boston's suburbs with big new facilities. 

As workers flow into the area to take jobs at these companies, they are creating demand for more housing construction, and suburban towns that for years have faced development dormancy are finally starting to wake.

The rise of companies in advanced manufacturing, including clean tech and battery manufacturing, is bolstering demand for industrial space in Boston's suburban market and helping to fill gaps left by the slowing life sciences sector, experts said last week at Bisnow's Future of the Suburbs event at Jumbo Capital Inc.'s 150 Royall St. in Canton.

"The Boston market is very diversified," Colliers Executive Vice President Kevin Hanna said, adding that emerging industries have helped bolster the area's traditional economic drivers. 

“Advanced manufacturing … and green energy technology is a rapidly growing sector,” he said. “That’s where we are seeing a lot of demand.” 

The demand for advanced manufacturing and biomanufacturing space is being met by moving outside of the Route 128 belt. With more space and power than in the area closer to Boston, the 495 belt has become an active development area for these types of projects.

Earlier this month, green tech company Electric Hydrogen signed a 187K SF lease for a new factory at King Street Properties’ campus in Devens, the second major clean energy company to move to the campus. 

Hanna represented Electric Hydrogen in the deal. He said that these types of companies are helping to fill gaps made by the recent slowdown in demand for cGMP, or biomanufacturing facilities. 

"You've got advanced manufacturing with green energy companies, battery companies, hydrogen fuel cell companies that require the same types of buildings, the same infrastructure and the same deal structure," Hanna said. "While cGMP has slowed down a little bit, it's being backfilled."

Green energy hasn't only expanded in the western suburbs but also on the state’s coast. Cities like Salem and New Bedford have seen a boom in offshore wind and have transformed their ports into green tech manufacturing hubs to build and store turbines.

Over the past five years, $12B in venture capital funds have flowed into Massachusetts’ clean tech, robotics and battery companies, according to Colliers’ Q1 2023 industrial report.

In 2021, Commonwealth Fusion Systems, a green tech spinoff from the Massachusetts Institute of Technology’s Plasma Science and Fusion Center, partnered with King Street to build a 47-acre fusion campus in Devens.

Green energy technology isn't the only industry that has begun to rapidly grow, Hanna said. Advanced manufacturing and biomanufacturing have begun to build out as demand continues to be a driving force.

Patrick Kimble, vice president of leasing for The Davis Cos., said that manufacturing has helped sustain activity in the suburbs as the office market has continued to struggle. 

"That's the one bright spot in the market today," Kimble said. "We saw a gamut of users. Everything from R&D to warehouse to robotics companies. The flex GMP market is very robust."

Davis began construction last year on a 214K SF, two-building manufacturing facility in Wilmington that is part of the firm's Upton Crossing flex campus, a five-building flex, distribution and manufacturing hub.

The rise of these industries has also created demand for more suburban housing, as workers want to not only live closer to their jobs but also in more affordable towns as Boston becomes more expensive. 

“The other thing that you see happen is as industry, and life sciences is a good example, that used to be very contained to Boston and Cambridge, as that’s pushed out to the suburbs, it is really filling that 128 and 495 gap [for residential demand], especially on the north side,” Procopios Cos. CEO Michael Procopio said. 

With this new demand, there have been some issues, as many of these suburban towns haven't developed much multifamily housing in recent years and are largely zoned for single-family.

Procopio said that a $20M project he worked on in Wilmington was the first multifamily development the town approved. The 74K SF, 49-unit project, dubbed Lume, opened in January near a Commuter Rail stop.

“The housing that has been required for those communities has been really profound, and they’ve been very supply-constrained because of it,” Procopio said.

Constricted multifamily supply isn't a new issue for Boston's suburbs. The NIMBYism seen in towns not willing to bring in more density has been a serious barrier to entry for bringing on new multifamily projects, developers said. 

In the Boston metro area, 17,000 new units of housing are in the construction pipeline, according to Colliers' Q1 2023 multifamily report. As employment continues to grow, with more than 70,000 new jobs added in the past year, along with more tenants renting by choice for flexibility, the need for these new units has never been more prevalent.

With the state’s implementation of the MBTA Communities law, which affects 176 Massachusetts towns and cities and encourages more density around transit stops, developers are making moves into uncharted territory. 

“It’s really just been in the last few years that people have even entertained the idea of a 495 multifamily development,” ZOM Living Managing Director Jim Dunlop said. “There’s been a housing push from the governor, lieutenant governor, attorney general to really push the MBTA communities.”