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BOSTON-The well being of the Massachusetts economy is increasingly being tied to the healthcare field, and one particular area doing its part to boost conditions is medical devices, according to a new index created by NAI Hunneman Commercial Co. that shows more than 10 million sf of real estate is being used by purveyors of such products for the first time. The occupancy spans office, laboratory and manufacturing real estate, providing the latter aspect a resilient element in contrast to declining demand from other drivers.

“It’s a good sector for the state,” NAI Hunneman president F. Michael DiGiano tells GlobeSt.com in releasing the inaugural NAI Hunneman Medical Device Real Estate Index compiled by his locally based real estate services firm during the past year. The 10 million sf is occupied by the top 200 medical devices firms as rated by the Massachusetts Medical Device Manufacturers Association.

The amount of space absorbed has risen 4.9% since the first quarter of 2005 when the total was 9.55 million sf. Boston Scientific leads the pack at 1.1 million sf, mostly in its Natick campus on Route 9, followed by 747,000 sf in Andover leased to Phillips Medical Systems. Other six-figure space consumers ranked in the top 10 include Cytyc, Instrumentation Laboratory, PerkinElmer and Tyco Healthcare. The per-employee average occupancy is 283 sf.

About 20% of the space is in buildings owned by the medical devices firms, and 57% of the space involved is located along the Route 128 belt. The mix was 42% office, 36% flex/research and 20% industrial, relays the index. “They are very adaptable, and landlords like that flexibility and communities like the different uses,” says DiGiano, who explains that such firms tend to be less migratory than others because of their need to retain a specialized workforce, and not just on the engineering side. The 10th largest user of space, Straumann AG, is a Swiss-based dental implant firm that took 170,000 sf at Minuteman Park in Andover in 2003. A key reason was the state’s abundance of jewelry craftsmen familiar with precious metals used in implants, says DiGiano, whose firm helped Straumann find the space.

Of 20 medical devices companies that relocated during the index survey period, just two moved from Route 128 to Interstate 495 despite sharply lower rental rates. “They tend to look at the commuting patterns of their employees,” DiGiano says. “That pretty much drives their space search.”

The index breaks down rental rates being paid throughout the region, and DiGiano says he hopes it can also help firms identify where fellow companies are clustered. That is another factor in determining where such firms wan to operate, although DiGiano says pricing considerations may ultimately have to come into play as the divergence of rates between Interstate 495 and Route 128 become more pronounced. Only a few large blocks of contiguous space are available closer in to Boston as the market recovers, says DiGiano. “They may have to expand their search” he says, simply due to a dearth of options.

Although not a new industry to Massachusetts, with DiGiano recalling Analog Devices looking for space at a business park he was operating in the 1980s, medical devices do seem to be gaining in recognition as an economic force, he says. “There’s no question it is receiving more attention,” he says, likely due to the higher profile of life sciences in general. Firms such as Genzyme are clouding the lines between biotechnology and medical hardware through mergers and new products, adds DiGiano, further enhancing the profile going forward.

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