Boston Life Science Smashes Barriers
Institutional investors are embracing life science with new fervor, enabling companies like T2 BioSystems to go public and then double its leased space, says landlord King Street Properties’ principal Tom Ragno, a panelist at Bisnow’s Boston Life Sciences: America’s Hotbed, Feb. 10, starting 7:30am at the Royal Sonesta.
In 2014, life science crossed the risk Rubicon, becoming a more viable option for institutional investors as personalized medicine and gene therapy help make healthcare more efficient and effective, says Tom (right with partner Steve Lynch) whose company owns three life science buildings in Cambridge and three in Lexington. In February, King Street plans to seek town approval to build a fourth 85k SF building in that suburb. Last year, one-third of the tenants in King Street’s 700k SF portfolio went public or sealed partnership agreements with major pharmaceutical firms that stabilized cash flow for themselves and their landlord.
Looking at a different metric, last summer the industry hurdled over an asset value barrier when the sale price of a suburban building anchored by life science firm Alkermes sold for $401/SF. Davis Marcus' sold 850 Winter St in Waltham’s Reservoir Woods for nearly $73M to GI and CalPERS. In 2012, the buyers had formed TechCore to acquire well-wired properties like this one that appeal to tech and life science tenants. So far, they’ve closed on 2.3M SF nationwide. Investors are opening their wallets as life science tenants grow revenues and solidify their balance sheets.
At 15 Cambridge Center, Biogen is recommissioning a 300k SF lab, making it more energy efficient, says Commodore Builders project executive Jason Theberge (also a panelist). Like other life science companies, Biogen wants to reduce lab HVAC expenses that are three to eight times more than in office buildings. Commodore is resetting the air flow to “dramatically” reduce Biogen's energy consumption and global footprint. Last year, Commodore did a 90k SF interior fit-out for Biogen at 301 Binney St (above), which is in a ground-zero location for life science: the now world-famous Kendall Square.
As life science picks up the pace of its growth, many construction firms working in the sector are having good years, says Jason (left with Rebecca Barlage and Andrew Sparaco). Biotech companies are recalibrating their real estate to build in more office space as they focus on their sales and marketing campaigns. Some, like Shire Pharmaceuticals at 200 RiverPark in North Reading, also are upgrading their supply chain and logistics systems in warehouse/distribution centers. Commodore is leading this Shire project due for completion in Q2 ’15.
As life science companies put greater emphasis on conserving energy use, their architects are focusing on how to more tightly control and decrease air flow in labs, says Steffian Bradley principal Erik Lustgarten (also a panelist). Erik, a Newburyport resident, assures us that the beach survived the blizzard...a cause for celebration at his house.
The Steffian Bradley team is spending time on designing fume hoods; and optimizing lighting controls and sound mitigation. In its real estate, the industry is also trying to make more room for “big data.” High-speed computer processing now generates more data than scientists can analyze, so more space is being devoted to “dry” labs that house computers with large--and sometimes multiple--screens.
Most important, life science companies want space that encourages spontaneous interaction between employees to spark innovation. It helps them fully realize their IP potential by connecting their own people in a casual yet confidential manner. It’s a matter of decompartmentalizing researchers who in the past were urged to structure their own ultra-private kingdoms. Erik and his team have various projects going for the Berkshire Innovation Center in Pittsfield, Bay State Health and Children’s Hospital in the Longwood Medical Area. To hear more, please join us for Bisnow’s Boston Life Sciences: America’s Hotbed, Feb. 10, starting 7:30am at the Royal Sonesta. Sign up here!