BOSTON—The laboratory availability rate in Cambridge. MA fell to just 2% at the end of 2015 year and in East Cambridge market conditions are now even tighter, despite new construction that came on line and new product currently under construction.

A report on the biotech real estate market in Greater Boston by brokerage firm Transwestern | RBJ states that the Greater Boston area lab market enjoyed 1.9 million square feet of “take up” in 2015, driving its annual availability rate to a record low 8%. However, Chase Bourdelaise, director of research, Northeast region for Transwestern, notes that a strong fourth quarter has pushed the year-end availability rate in the Greater Boston area down to 5.4%, thanks to 255,000 square feet of take up. The brokerage firm states that its take up calculations provide a more timely measurement than absorption by tracking availability changes when leases are signed, intentions to vacate are announced or users break ground on new projects.

The laboratory availability rate in Cambridge dropped from 8.1% in the first quarter of 2015 to 2% at year-end on 1.7 million square feet of annual take-up.

The latest Transwestern report follows a very strong performance by the biotech/biopharma sector in the second quarter of last year.

If those statistics don't portray a market with keen demand and tight market conditions, well then the highly sought after East Cambridge region should be the final strokes to a much clearer picture. Bourdelaise reports in his bioSTATus year-end 2015 report on Greater Boston that in 2015 East Cambridge posted 1.1 million square feet of take up, dropping its availability to 0.8%, a new record low. The existing East Cambridge lab market totals 5.4 million square feet.

Bourdelaise says a driving factor for the attraction of bio/pharma companies to the Boston area is its talent pool. “We track the U.S. employment for the bio/pharma related industries at 950,000 and Boston at 60,000. The important point here is that Boston has the highest concentration of bio/pharma-related workers than any other market, at 3.5 times the U.S. average,” he says. The Transwestern report notes that biotech employment in Greater Boston posted a net gain in 2015 of 920 jobs, a 209% increase from jobs created in that sector a year earlier.

Demand has driven new construction in the biotech/biopharma sectors and has resulted in the increase of lab inventory from 8.1 million square feet in the second quarter of 2000 to 19.5 million square feet today. Last year, 1.4 million square feet was added to the inventory and at present there is another 1.6 million square feet under construction. In Cambridge alone, there was 958,000 square feet of lab inventory added to the market last year.

He tells Globest.com that 76.2% of the lab product under construction is already pre-leased. The 1.6 million square feet in new construction at present involve five major projects, four of which are already significantly leased and are located in Cambridge or East Cambridge.

The 300 Massachusetts Ave. project in Cambridge, which totals 250,000 square feet, is fully leased and is anchored by Millennium/Takeda Oncology Co. The 610 Main St. North building in East Cambridge, totaling nearly 273,000 square feet boasts Pfizer as a tenant and is currently 52% leased. That building is scheduled to be delivered in the fourth quarter of this year. Alexandria Real Estate Equities is constructing its 50-60 Binney St. and 100 Binney St. buildings in East Cambridge. The 541,000-square-foot 50-60 Binney St. property is 100% leased and boasts major tenants Genzyme and Bluebird and is expected to be completed in the third quarter of 2017. The 431,000-square-foot 100 Binney St. property is 49% leased and boasts major tenant Bristol-Myers Squibb. The building is projected to be finished in the fourth quarter of 2017.

The only speculative office building under construction is King Street Properties' 115 Hartwell Ave. in Lexington. The 91,000-square-foot lab building does not have any confirmed tenants and is expected to be completed in the first quarter of 2017.

“Supply constraints in Cambridge have caused tenants to look toward the Longwood Medical area and the western suburbs for quality space,” Bourdelaise says. “Shire expanded by just over 200,000 square feet in Lexington to occupy a total of 900,000 square feet. The strength of the overall market has attracted a number of real estate investors, with 34 lab building transactions this year (2015) for a total of $2.97 billion.”

When asked by Globest.com his view of the lab market in Greater Boston and Cambridge going forward, he said, “I am expecting continued growth and rents are going to continue to rise as availability remains tight. It is going to be a battle for space in Cambridge, as it has been.”

He adds, “A second (after) space comes on line (in Cambridge) you already have people who have heard about it and most of the time it has already been leased up. So, it is going to remain tight and continue to become an epicenter of the biotech industry worldwide.”

The laboratory availability rate in Cambridge dropped from 8.1% in the first quarter of 2015 to 2% at year-end on 1.7 million square feet of annual take-up.

The latest Transwestern report follows a very strong performance by the biotech/biopharma sector in the second quarter of last year.

Instant Insights /

Cambridge's Lab Market is the 'Epicenter of Biotech Industry Worldwide'

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