Boston's Newmarket neighborhood. Boston Planning & Development Agency photo

Greater Boston industrial rents spiked 4.4 percent in the second quarter as vacancies dipped below 5 percent, according to a brokerage report.

Average asking rents hit $11.84 per square foot, while the vacancy rate declined from 5.3 to 4.9 percent in the second quarter, according to Hunneman’s RealInsights report. Developers broke ground on 400,000 square feet of new construction during the second quarter.

The market is shrinking as industrial properties in the Boston urban core continue to be redeveloped as housing and life science facilities, with the inventory declining by 182,580 square feet in the second quarter.

Somerville’s Inner Belt neighborhood which is located in a federal Opportunity Zone is “on the cusp of a significant transformation,” according to the report by Hunneman Director of Research Tucker White, as life science development booms in the neighboring Union Square, Cambridge Crossing and Hood Park submarkets.

New York-based North River Co. this month kicked off permitting for a 200,000-square-foot speculative lab building at 28 Chestnut and 28 Fitchburg St. in the nearby Brickbottom neighborhood.

Development activity is pushing beyond Interstate 495 and into Worcester County and southern New Hampshire, amid demand from e-commerce and biomanufacturing tenants. Asking rents in the 495 north suburban market rose 13 percent in the past year.