Lornell Real Estate has published its Mid-Year 2026 Worcester Commercial Real Estate Market Report, an 11-page review of the industrial, multifamily, office, and retail sectors built on CoStar data through July 2026 and Oxford Economics demographics. The download is free. This article covers the highlights.
$1.19 billion in investment sales traded across the four major sectors over the trailing 12 months.
Retail vacancy fell to 3.3%, the tightest CoStar has recorded here, with just 24,000 SF under construction.
Industrial vacancy rose to 9.4% as 1.9 million SF delivered, but small-bay space under 20,000 SF sits at 4.4%.
Multifamily sales hit $493 million, 66% above the five-year average, led by two nine-figure Worcester trades.
Office is repricing to local buyers: top-tier space is 13.9% vacant while older stock runs 5.3%.
Four sectors, four different speeds
The four property sectors are not moving together. Retail is the tightest it has been on record. Industrial is working through a record construction pipeline. Multifamily cleared nearly half a billion dollars in sales. Office is repricing into the hands of the people who use it.
| Sector | Inventory | Vacancy | Asking Rent | 12-Mo Sales | Cap Rate |
|---|---|---|---|---|---|
| Industrial | 119.9M SF | 9.4% | $10.83/SF | $378.6M | 7.8% |
| Multifamily | 31,250 units | 6.5% | $2,118/unit | $493.5M | 6.4% |
| Office | 33.3M SF | 10.2% | $24.72/SF | $82.6M | 11.4% |
| Retail | 49.1M SF | 3.3% | $17.87/SF | $236.0M | 7.8% |
Source: CoStar, trailing 12 months through July 2026. The market area is CoStar's Worcester market, which includes Worcester County, MA and Windham County, CT.
Where the year's deals landed
The headline transactions and groundbreakings of the past 12 months, mapped across Worcester County — from the nine-figure multifamily trades downtown to the million-square-foot groundbreaking in Charlton and the institutional industrial buys in Westborough and Devens.
Aria on the Row · $157M
Worcester, MA · Multifamily · 370 units · $424K/unit
Morgan Stanley (Eaton Vance)
145 Front at City Square · $122.2M
Worcester, MA · Multifamily · 5.0% cap
Jones Street
Goldstar Crossing · $31M
Worcester, MA · Retail · $465/SF
Crosspoint, Fidelity & GIC
Worcester Business Center · $14M
Worcester, MA · Office · 265,000 SF · $53/SF
UMass Memorial (owner-user)
Otis Street Park · $95.2M
Westborough, MA · Industrial · Four buildings
EQT (from Brookfield)
Commonwealth Fusion Building · $74M
Devens, MA · Industrial · $448/SF
Declaration Partners
Charlton Commerce Center
Charlton, MA · Groundbreaking · 1,197,000 SF
GFI Partners
Dollar Tree — Spencer Shoppers Village
Spencer, MA · Lease · 8,056 SF
Leased by Lornell Real Estate
Retail: vacancy is scarce because supply keeps shrinking
Retail vacancy fell 1.3 points to 3.3% on roughly 500,000 SF of positive absorption. The construction pipeline is 24,000 SF. Against 49 million SF of inventory, that is effectively nothing, and about 270,000 SF has been demolished over the past three years. The supply base is shrinking while the demand keeps showing up.
The big boxes are refilling. Solomon Pond Mall absorbed 163,482 SF in the second quarter. Shrewsbury Crossing added 64,215 SF, Webster Plaza 57,000 SF, and a former Bed Bath & Beyond box took 44,000 SF. Malls now run 1.0% vacant.
Institutional money came back to the sector. Crosspoint Associates, Fidelity, and GIC bought the CVS-anchored Goldstar Crossing in Worcester for $31 million ($465/SF). We were in the flow too, leasing 8,056 SF to Dollar Tree at Spencer Shoppers Village in the first quarter.
Retail owners have their strongest pricing leverage in years. Vacancy is 3.3% with near-zero new supply, and CoStar forecasts the same 3.3% through 2030. If you have thought about selling or repricing leases, this is the backdrop you want.
Industrial: the market is digesting the supply wave
Nearly 1.9 million SF of new industrial space delivered over the past year, and the market is still working through it. Vacancy ticked up to 9.4%, and it is concentrated almost entirely in large-bay speculative logistics. Buildings over 200,000 SF are 14.4% vacant. Small-bay space under 20,000 SF is just 4.4%.
Leasing depth is still there. A 616,875 SF commitment at 75 Plain St led the year. Champagne Logistics took 300,000 SF at 1 National St, and Eaton renewed 241,000 SF on Gold Star Blvd. Two mega-projects broke ground in 2026: GFI Partners' 1,197,000 SF Charlton Commerce Center and a Prologis 845,504 SF facility, both delivering in late 2027.
Institutions paid up for quality. Declaration Partners bought the Commonwealth Fusion building in Devens for $74 million at $448/SF. EQT acquired $95.2 million of Westborough product from Brookfield. Asking rents rose 3.7% on the year, and CoStar forecasts roughly 3.5% annual growth through 2030, the fastest of any sector.
Multifamily: a record sales year, and a pause on supply
Institutional buyers set new price marks in 2025. $493 million traded, 66% above the five-year average, led by Morgan Stanley's $157 million purchase of Aria on the Row ($424K per unit) and Jones Street's $122 million purchase of 145 Front at City Square at a 5.0% cap rate.
Fundamentals paused while roughly 790 new units delivered. Vacancy rose to 6.5% and rent growth held at 0.6%. The pipeline behind this wave is thin. Just 748 units remain under construction, and CoStar projects vacancy back near 5% by 2028.
The buyer mix flipped in 2026. Local buyers are ahead $20.8 million net year to date while national institutions are net sellers. Per-unit pricing rose from $207K in 2023 to $243K in 2026, and the forecast reaches roughly $269K by 2030.
Office: the quality curve is upside down here
Worcester office runs opposite the national script. The top of the market is the soft part. 4 & 5 Star space is 13.9% vacant and asks less than mid-tier 3 Star product. Older 1 & 2 Star buildings sit at 5.3% vacancy. Affordable, functional space is what leases in this market.
Users are the buyers now. UMass Memorial bought the 265,000 SF Worcester Business Center it partly occupied for $14 million at $53/SF. The year's biggest lease was Webster Five Bank's 41,065 SF at 35 Millbury St. Outside the Boroughs corridor, where vacancy is 24.8%, submarket vacancy runs just 3.5 to 7.5%.
The economy underneath the numbers
Median household income in the Worcester metro crossed $100,049Median Household Income, about 18% above the U.S. figure. Total employment is 360,000 jobs, growing faster than the national rate, anchored by an education-and-health sector 1.4 times the national concentration. Leisure and hospitality is the fastest-growing sector at +1.92%, and you can see it in the restaurant and experiential retail absorption downtown.
What I'd tell you if you own here
- Retail owners: peak pricing leverage. Test the market.
- Small-bay industrial owners: your product is scarce and the institutional bid is proven.
- Multifamily sellers: the local buyer bench is deep and actively buying.
- Office owners: owner-users pay best. Market to them.
The full report includes submarket vacancy and rent breakdowns for every sector, the eight largest transactions of the year, cap rates by sector, a market-area map of where the deals landed, and the 2026-2030 CoStar forecast. It is free: enter your email in the banner at the top of this article and we will send it to you.
Questions about what these numbers mean for a property you own? We prepare complimentary broker opinions of value using the same data behind this report. Call Collin Mulcahy at 774-230-3634 or email [email protected].
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