BOSTON—How is Boston’s biotech real estate market? “Frenzied, heated, fervent,” says Boston brokerage form Hunneman in its latest report.
“Characterized by expansions, new development and record funding activity, 2018 marked the second-highest annual net absorption total in the last five years. Despite 17 consecutive quarters of positive absorption, speculative construction put upward pressure on vacancies in the local lab market during the fourth quarter,” the report said.
Availabilities remain scant, especially in Cambridge, said the report.
“With roughly three million square feet in tenant requirements throughout Greater Boston, developers and landlords are getting more creative in terms of space useage and growing biotech clusters outside of Kendall Square,” the report said.
The Massachusetts life science industry hit a funding high, for both venture capital and IPOs, in 2018. The report said that VC funding among local biotech companies is at a five-year high with more than $4.3 billion raised during 2018.
“Lab conversions are gaining traction especially in the suburbs. Demand from biotech companies is at an all-time high, and suburban landlords are moving to meet this growing need. Several buildings/spaces have already been repositioned for lab use; including 1 Patriots Park in Bedford and 451 D Street in Boston,” the report said. “Others are looking to tap into this outsized demand.”
Here are other highlights from the report:
- In Waltham, 60 Sylvan Road, which Verizon will vacate in its relocation to North Station, has been earmarked for lab
- At 1560 Trapelo Road, a lab conversion is being considered for the space formerly occupied by
- Boston Properties is reportedly redeveloping 33 Hayden Avenue in Lexington and 200 West Street in Waltham as well.
“Tight market fundamentals will ultimately lead to more activity outside of the traditional biotech nodes. Look for new supply in the form of ground up construction and redevelopments throughout Greater Boston,” according to Hunneman Report. “Developers are pushing geographic boundaries as well, with proposals for new lab space popping up in South Boston, the South End and Allston/Brighton. (See the graph below for more information: Source: Hunneman)