What Will Happen To All Of Boston’s Unbuilt Lab Development Sites?

Across Greater Boston, development sites that were planned for more than 10M SF of lab construction sit inactive.

As life sciences vacancy continues to reach new highs, developers that had initially planned to build speculative lab projects now face a market that won’t support it — and dozens of projects have stalled.

Some developers have sold these sites for substantial losses, while others have pivoted to build multifamily or office. And if the market doesn’t improve soon, experts foresee some owners of unbuilt sites falling into financial distress.

"A lot of those projects did move forward and either completed or will be completed soon, but millions and millions and millions of square feet of that didn't really materialize," Colliers Research Director Jeff Myers said.

At the end of the fourth quarter, the Greater Boston life sciences availability rate rose to 26.9%, 10 percentage points higher than a year earlier, according to Colliers. More than 15M SF was available across Greater Boston at the end of 2024, creating a vast pool of competition for any developers that would try to start a new lab project.

The Boston area has 29 lab projects designed to yield more than 10.7M SF that have been permitted or proposed but haven’t broken ground yet, according to data provided by Cushman & Wakefield. All but one were planned as speculative builds.

The Seaport has the most unbuilt lab projects at 12. Cambridge has five, and the Urban Ring submarket, which includes parts of Boston and the inner suburbs outside of the major lab clusters, has nine.

Many of these properties were acquired by developers during the height of the lab boom, as companies spent millions on sites they envisioned for lab projects. As the lab market stalled and developments became harder to start, the price at which many owners bought land made it hard to pencil for other types of projects.

Cushman & Wakefield Vice Chair Connor Barnes said that although some developers are selling properties or pivoting away from labs, he expects more distress in the market will likely follow in the next couple of years.

"It's going to be very challenging for many people that paid a premium for a development site to be able to do much else with it," Barnes said. "We're still a little early in seeing what is going to happen with some of these sites that were sold for a premium because of the life science market."

In the first quarter of last year, signs began to emerge of looming distress in the market for Boston-area lab development sites as life sciences heavyweights sold properties where they had planned to build labs — at prices far below what they paid.

"For those projects, those developers are the ones that you're starting to see that, depending on how far along in the process they were, are now starting to make headlines because they're disposing of that land," Meyers said. "They're switching gears to other property types and so forth."

In February 2024, Alexandria Real Estate Equities sold a three-story office building in Andover for $3.9M, well below the $14.3M it paid for the property two years prior.

A month later, the life sciences REIT unloaded a couple of South Boston industrial sites for $13.3M to a digital marketing firm. The REIT had planned to build a 210K SF lab complex on the site.

Early this year, life sciences REIT IQHQ sold a site at 103 N. Beacon St. that was planned for a 150K SF lab development. IQHQ sold it to the development arm of New Balance for $17.5M, down from the $27.5M price tag it paid in 2022.

"I would say the most distressed asset class, if everybody is being honest, is land, right?" Newmark Capital Markets co-Head Robert Griffin Jr. said at a Bisnow event in January.

Griffin added that due to the high premiums paid to acquire the land at the height of the lab boom, those numbers no longer pencil for a new development in today’s market conditions.

He said some developments could still be successful, but other sites present a good investment as they begin to sell at discounted prices.

“It’s going to be the haves and have-nots,” he added. 

At least one city has jumped in to acquire properties no longer suitable for a lab.

Last month, Watertown officials approved the acquisition of a development site at 148 Waltham St. for $9.2M. The city bought the site from Burlington-based Nordblom Co. Watertown officials haven't announced a concrete plan for the site but have floated many ideas, including affordable housing and a new senior center.

“As we all are aware, the life science boom has become a bust at this point, and so having done some due diligence, the manager was able to contact the owners of the site,” Watertown City Council President Mark Sideris said during a city council meeting in February.

The site is just one of a handful of buildings across the city that have halted lab development. There were 11 permitted but unbuilt lab buildings throughout Watertown as of March, the Boston Business Journal reported.

While a series of unbuilt lab sites have been sold, some developers that had planned to build labs are making their own pivot to other uses.

The Davis Cos. proposed building a 315-unit apartment complex last month on a site that was approved to be a 200K SF life sciences development at 455 Totten Pond Road in Waltham.

The site is a “very well-located multifamily development opportunity” given the need for new housing supply, Davis Chief Development Officer Mike Cantalupa said in a statement to Bisnow.

Last month, The Bulfinch Cos. floated the idea of a multifamily project on its Muzi Ford site in Needham. The site was approved for a 465K SF lab development in December 2022.

Katherine Shoss, senior vice president at The Bulfinch Cos., said in a statement that the firm is evaluating multiple options for the property, "including expanded opportunities to encompass multi-tenant residential, medical office and commercial space with a variety of amenities to compliment the neighboring community including retail, restaurants and outdoor public spaces such as walking paths, pickleball, etc."

Myers said that for developers looking to pivot away from labs, multifamily is a "popular" option due to its relatively low vacancy rates.

"Rents in multifamily are reasonable,” he said. "It maybe isn't leasing up as fast as they were a couple of years ago, but the fundamentals are much healthier."

For many life sciences development sites, Barnes said it is still too early to know their fate.

He said some could still be built as labs if they can land major preleases — like BXP's 570K SF 290 Binney St. development, which is 100% committed to AstraZeneca, or BioMed Realty's 600K SF lab building that was preleased to Takeda Pharmaceutical Co. Both buildings secured leases in 2022 and are set to complete in 2026.

For other developers, more distress could be on the horizon.

"It depends on who the owner is," Barnes said.

"Are they a long-term holder? Are they a life science developer that's going to hold on to it and wait for the market to turn at some point in the future? Is it someone that got into the life science sector a little bit too late and wants to sell? I think there's going to be a series of different answers depending upon the specifics of the site and the location and the ownership."