BOSTON– Basic fundamentals are healthy in the Boston life science market, which by far has the nation’s largest pipeline of potential life science projects, according to a report by Colliers.
Big leases are closing and millions of square feet worth of tenants are looking for space, according to the report.
Here are key takeaways on the :
- Empty space is rare. The overall availability rate in the metro ticked up to 2.4% in the first quarter due to tenants returning space to the market and some new space not yet being fully committed.
- Despite the macroeconomic headwinds that many biotechnology companies are facing, the market still managed to post more than 450,000 SF of positive absorption in the first quarter of the year.
- With tens of millions of square feet in announced or underway projects, Boston easily has the largest potential pipeline of life science space in the nation.
- As more projects deliver and companies set up shop, the market will solidify its status as the nation’s leading biotechnology hub.
- With space availability below 2%, the space crunch has yet to abate. Landlords still have pricing power and rents may continue to expand. That’s not to say there haven’t been some headwinds: Boston-based companies such as Kaleido Biosciences and Yumanity Therapeutics laid off workers in recent months, and availabilities in some submarkets ticked up in the first quarter due to sublease space returning to the market. But ultimately, the outlook for future absorption is positive.
- Major life science leases are getting done in Boston. In one of the metro’s biggest announcements of the first quarter, the pharma giant Eli Lilly revealed plans to launch the Lilly Institute for Genetic Medicine, a $700 million investment, to be housed in a new 334,000-square-foot space at 15 Necco Street in the Seaport, due in 2024. The property will also feature shared space for local biotech startups.
- New deliveries in 2022 will open the door for more absorption. Breakthrough Properties’ first quarter completion of “The 105” added 260,000 square feet at the Seaport, fully leased by CRISPR. Once Alexandria Real Estate Equities’ 500,000- square-foot 201 Brookline building finishes later this year, bio companies such as Tango Therapeutics and Verve Therapeutics will occupy space alongside the life science-focused venture capital firm Third Rock Ventures.
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