CAMBRIDGE, MA-Peptimmune, Inc. has signed a lease/sublease for 11,692 sf of laboratory space at University Park at M.I.T. on 64 Sidney St. Meredith & Grew, Inc.’s Joe Flaherty and Tucker Hansen brokered this three-party transaction consisting of a 7,357 sf direct lease with the property owner, Forest City Development and a 4,335 sf sublease with the sublessor, Alkermes, Inc.

The deal is good news for the Cambridge market where the once invulnerable biotech market is showing signs of softening. According to Meredith & Grew’s most recent market statistics, biotech vacancies have steadily increased over the past 12 months. As a result of space givebacks, the vacancy rate for existing biotech space increased from 3.7% at 2002′s year end to the current 8.4%. The overall biotech vacancy rate, which includes “biotech ready” shell space, is now 12.1%.

The most recent leases in Cambridge achieved rents in the $53 to $57 per sf range. However, the market report indicates that the higher vacancies, especially the sublease offerings as well as slow demand have led to a reduction in asking rents. Direct “biotech ready” shell space is now offered in the $42 to $55 per sf range, which includes a tenant improvement allowance from the landlord of $80 to $100 per square foot. Quoted rents on second-generation sublease offerings vary widely from $20 to $45 per sf.

Peptimmune, acquired by Genzyme Corporation in 1999 and later spun out in January 2002, has developed a technology that inhibits harmful immune responses while preserving normal autoimmune function. The company is also applying this approach to diseases that cause inflammation, like rheumatoid arthritis and multiple sclerosis. The company hopes to move its lead compound, a therapy for pemphigus vulgaris, an autoimmune disorder of the skin, into Phase I clinical trials later this year.

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