The growing biotech hub in the Boston area has attracted drug developers virtual and multinational to set up shop near the bay, but the boom in demand is threatening to outstrip inventory, according to the Boston Business Journal.
Per real estate firm Transwestern's latest look at the market, the vacancy rate for lab space in Cambridge is at a roughly 10-year low of 13.9%, BBJ reports. And stretching out to the suburbs--including Watertown, Lexington and Waltham--the availability rate hovers around 8.5%. By comparison, from 1998 to 2011, suburban lab vacancy averaged about 17.3%, according to Transwestern, reflecting the region's explosive life sciences growth.
The area's latest major tenant is Baxter ($BAX), which, on the eve of spinning out its biopharma division, leased a 200,000-square-foot operation in Cambridge's Kendall Square, setting it up right next to MIT, Harvard and a slew of startups. The allure of working shoulder-to-shoulder with top academics and forward-thinking biotechs has lured Pfizer ($PFE), Novartis ($NVS) and Sanofi ($SNY) to expand their presences in the neighborhood, and Johnson & Johnson ($JNJ) has stood up one of its deal-scouting startup factories in Cambridge.
And suburban demand remains high, as well, with Shire ($SHPG) building up a U.S. headquarters in Lexington, announcing this month plans to transfer 500 workers to a home base that will employ roughly 2,000. AstraZeneca ($AZN) has been expanding its presence in the suburbs this year, as have smaller outfits like Kala Pharmaceuticals, Verastem and ImmunoGen.
The resulting strains on supply have had downstream effects on firms looking to follow the trend, Transwestern Partner Eric Smith told BBJ, and the firm has "seen some companies hit the pause button on their expansion plans."
But more inventory is on the way. Alexandria Real Estate has just opened a 408,000-square-foot lab space in Cambridge with Biogn Idec ($BIIB) as an anchor tenant, and, working with National Development, is nearing a ribbon-cutting for a 413,000-square-foot Boston hub.
- read the BBJ story