Weird Science: Boston's Life Sciences Users Squeezed Into Unlikely Spaces
Greater Boston’s life sciences industry has to accept a future away from the Red Line if it wants room to grow.
“In the past, Sidney Street or Cambridgeport was the original relief valve for Kendall,” NAI Hunnemann Director of Research Liz Berthelette said. “Now, it’s come into its own as a desirable cluster of biotech.”
High prices and low vacancy is not news in East Cambridge, but the next generation of life sciences hubs is. Berthelette’s Q4 2017 Metro Boston Biotech Beat report notes several emerging biotech clusters, including Sidney Street in mid-Cambridge. Vacancies were in the 30% to 40% range when Vertex Pharmaceuticals left for the Seaport in 2014. Three years later, there was no availability in the 1.1M SF lab corridor.
“It’s so close to Kendall; it’s so close to MIT,” Berthelette said. “It just makes sense.”
But Sidney Street is tapped out, and new space is not arriving fast enough. Nearly 1.8M SF of lab space is under construction in Cambridge, and close to 60% of it is already pre-leased, according to the report. The high prices and high demand are pushing life sciences to farther neighborhoods, including Alewife, the Seaport and Allston, as East Cambridge closed 2017 with only a 0.2% lab vacancy rate.
“Boston Landing was a surprise to me. I’ll tell you that,” Berthelette said. “When I first heard a few years ago they were marketing to lab users, I didn’t think they’d land anyone.”
Boston Landing in Allston was originally pitched as a center for innovation tenants. After a string of deals in 2017 that included Mass Innovation Labs, Proteostasis Therapeutics and Roche Diagnostics Operations, the transit-oriented development is viewed as a formidable biotech force in relation to other emerging life sciences clusters.
“You have Harvard doing whatever they’re doing in Allston,” Berthelette said. “All that development going on throws a little bit more behind Boston Landing.”
The first wave of commercial buildings at Boston Landing that have been completed or are nearing completion are 95% leased, including New Balance’s 250K SF headquarters, the 246K SF 80 Guest St. and the soon-to-be-complete 160K SF 40 Guest St. The development shows signs of also capturing Kendall’s science-and-tech feel, as it lures companies like Bose, and Harvard continues to develop its nearby Allston campus into a center for innovation.
“Boston Landing is the kickoff for projected growth in this section of Boston when you factor in planned projects by Harvard,” NB Development Group Managing Director Jim Halliday said. “It also provides an alternative for companies from the western suburbs to relocate or expand into the Boston market to have the best of both worlds by providing employees access to the Worcester/Framingham commuter rail while also being able to tap into the urban labor workforce.”
The continued, outsized growth from Cambridge is even pushing some companies beyond the urban core. Investors are converting and upgrading suburban properties to cater to life sciences users, as well as building new ground-up product, in the case of 828 Winter St. in Waltham, Colliers International Director of Research Aaron Jodka said. Watertown has also been a recipient of the life sciences shuffle, attracting both C4 Therapeutics and Addgene from Cambridge to Linx, a development in the city’s East End neighborhood.
“The operating costs of being in the suburbs are roughly half of the cost in Cambridge,” he added. “With a strong base of talent along the Route 2 corridor, Lexington and Waltham have been focal points of activity.”
While the lack of space has limited Cambridge’s rent growth and been a boon to the emerging life sciences clusters, there is still plenty of space in the pipeline. The first phase of the 45-acre Cambridge Crossing will open in 2019, and MIT is beginning to plan its redevelopment of the 14-acre Volpe Transportation Center, which is expected to bring an additional 1.7M SF of office and labs to Kendall Square.
“The growth outside of Cambridge is interesting, and it will be interesting to see which clusters hold long term,” Berthelette said. “These companies are moving to Waltham, but will they move back to Cambridge if space opens up?”