To a passerby, the glass-fronted 10 Prospect building rising above the low-slung restaurant and retail space of Somerville's Union Square could be any one of the multitude of life sciences outposts in the Greater Boston Area. But look closer and you'll notice that something is wrong.
The 150-foot building was completed in 2024 to provide around 200,000 square feet of lab and office space as part of a larger mixed-use redevelopment plan for the square. But peer through the glass curtain wall facade and you'll see that the first floor is absent of internal walls, finishes or even a proper floor. Instead, a spread of oversized gravel covering the ground inside makes the interior look more like a mountain biking course than the lobby of a cutting-edge life sciences development.
Beyond a couple of restaurants that have already set up shop on the first floor, the building remains empty, with leasing advertisements plastered on the windows to cover up the unfinished insides.
10 Prospect is one of many such buildings dotted across the Greater Boston area, a testament to the fact that Boston’s life sciences real estate market remains in tricky territory. Between the end of 2021 and midway through 2026, vacancy rates for lab and manufacturing spaces in Massachusetts increased 11-fold to 31.1%, according to a recent report by trade body MassBio. So what's gone wrong?
For decades, space-limited Boston real estate developers took pride in sticking to an old adage: never overbuild. Even though the city was already one of the most expensive places in the country to live and do business, developers avoided speculative construction, Greater Boston Real Estate Board (GBREB) CEO Greg Vasil told Fierce.
Then came the pandemic. The flood of federal funding injected into the biopharma industry caused lab and manufacturing inventory to explode. Life sciences real estate in Massachusetts grew from 21.5 million square feet to 40 million square feet between 2015 and 2021, according to MassBio. By 2023, it had exceeded 60 million square feet.
Initially, lab space couldn't keep up with demand, with vacancy rates dipping from 5.9% in 2015 to just 2.7% by 2021. But a subsequent drop-off in investment combined with a steady stream of more space coming online changed the picture, leading to the current situation where nearly a third of the state’s manufacturing and lab space sits empty.
“Honestly, it’s just survival right now,” Vasil said. “People thought that after COVID there was an infinite need for lab space, so they just built it. From a real estate perspective, they absolutely flooded the market with supply.”
Matt Gardner, president for life sciences at real estate firm CBRE, also pointed to increased speculation that preceded the pandemic.
“If you were to look at the industry from the middle of the 1980s to about 2017, the paradigm was always the same,” Gardner told Fierce in an interview. “Campus developers around the big biotech clusters would hold the next phase of development on campus until pre-leasing activity reached something like 50%. They were protecting themselves from speculative investing.”
“The only time that has been different is that sort of end-of-a-bull-run that was now, in hindsight, the longest bull run that life sciences has ever had, which was about 2015 to 2021,” Gardner explained. “The wave of overinvestment led us to commence new construction for the first time in the industry’s history on pure speculation.”
The vacancy rates speak for themselves, and several massive developments that have opened in recent years remain mostly empty, grabbing headlines along the way.
After visiting 10 Prospect, Fierce biked down to Assembly Row on the other side of Somerville. The master-planned 45-acre development has transformed a former Ford assembly plant into an urban hub complete with thousands of apartments and dozens of restaurant and retail options. The area has also bet big on healthcare and life sciences, including a number of Mass General Brigham (MGB) clinical and administrative facilities and other large developments.
One such project was 74M. The 15-story, 465,000-square-foot building has sat empty since being built in 2024, though it recently signed a lease for floors 2-4 with MGB’s pathology lab. The team should move in within the next 18 months, according to 74M developer Greystar’s Senior Director of Life Science Investment Management Matt DeNoble.
Head across the Charles River and it's only a slightly better story. The Harvard Enterprise Research Campus, situated near Harvard Business School, opened in June with 510,000 square feet of lab space. Roche's Genentech signed a lease in the One Milestone building for three of its nine stories, but much of the remainder is currently unoccupied.
Finding tenants hasn’t been easy for life science developers and owners, Vasil said.
“I was talking to somebody at a larger company, and they said, ‘We've got all this space. We're trying to figure out what we can do with it,’” Vasil added. “They want to be creative. They want to be innovative. But it's hard because they have so much.”
‘We believe it’s a reset’
Real estate investment firm The Davis Companies has been in the biotech space in Boston for decades. Jon Needham, senior vice president of asset management, sees the current vacancy rate as part of a return to a healthy market rather than the end of Boston’s run as a biotech powerhouse.
“We do not believe that this is anything other than a reset,” Needham told Fierce. “How deep a reset? How long? Those are all things we’re tracking—but at a high level, we believe it’s a reset.”
Reset or not, even positive signs for the industry, like Big Pharmas ramping up their M&A, could bring their own problems. While there may be gains down the road, consolidation can reduce biotech footprints in the short term.
“These pharma mega-campus projects are not every year, but sometimes an acquirer goes through the consolidation of three to five acquisitions into one regional hub,” Vasil said.
Davis’ Needham didn’t mince words about the last few years. “There’s been an undeniable slowdown in leasing momentum, and a correction is happening in real time in the market,” he said.
But if the vacancy rates are broken down by properties’ infrastructural quality, financial health, location and owners' willingness to invest and make improvements on behalf of tenants, “you see a much different story,” he suggested.
“That’s what we believe,” Needham said. “It’s not a one-size-fits-all kind of industry.”
One solution that has been circulated is converting biotech space for use by other buyers.
“The overall denominator is being changed by alternative uses,” CBRE's Gardner said. “If you’re a landlord or a developer and you are building the types of shells that are intended for labs, it turns out that the systems, the infrastructure, the power—the sort of robust nature of those facilities—translates well to other industry use types like microelectronics, robotics and advanced materials.”
“We started to see that happening, particularly in the Bay Area and Massachusetts,” Gardner added.
Another shadow over Boston’s biotech scene is the shortage of affordable housing. While converting lab space to residential developments would be an elegant solution that could in principle alleviate both the housing crisis and lab vacancies, Vasil said it often isn’t practical.
“It’s not simple to convert lab space to housing because nobody’s going to pour the kind of money into it that it needs to make it housing,” he said. “It’s already an expensive product to build with the HVAC [airflow] and everything else you need. And then what do you rent it for? It’s not affordable housing. It’s going to be expensive.”
Davis’ Needham has helped manage the lease-up of 66 Galen, a property in Watertown, Massachusetts, outside Boston that is an example of how a top-of-the-line life sciences development can buck the trend plaguing other properties in the region.
The 225,000-square-foot property was completed in 2024 and Needham said the site entered 2025 as a vacant building, but by the end of last year 95% of the space was leased. The largest tenant in the building is Bill Gates- and Jeff Bezos-backed drug discovery company LifeMine, which raised a $188 million series E in August.
Needham said a combination of factors helped the building attract life sciences companies. He pointed to the property’s robust management apparatus to help tenants best utilize the building and get what they need out of it.
The building's owners also listened to feedback from tenants and added amenities like a 75-person conference room and a loading dock management system to existing attractions including an onsite gym, coffee shop and roof deck. Tenants began recruiting other companies with connections to the building, adding to the momentum.
“There’s a different feel when you walk through the building, and there’s respect and admiration across tenants,” Needham said. “There’s an ecosystem that gets built in the building. It creates a certain type of buzz.”
The story of 66 Galen illustrates Needham's belief that life sciences developers in Boston who are willing to invest in their properties, be responsive to existing and potential tenant requests and build top-of-the-line facilities can still be successful.
“We as a company are bullish on biotech and life sciences in Greater Boston,” Needham said. “We believe in the industry. We believe it’s incredibly important to the economic development of the region.”
GBREB’s Vasil agrees that for those willing to reinvest in a property, the industry is showing promise. “There are deals to be made out there,” he said. “The question is how long can the assets sit out there?”
But not every property can be shiny and new with all the bells and whistles. For those older properties, Needham predicts that rents eventually will come down or the property will be converted to another use. In the short term, it will keep Boston’s life sciences vacancy rates high.
“The non-purpose-built new product may drag down performance in the coming quarters and in short years,” he said.
Despite the empty space and amount of square footage available for tenants, those with properties at the top end of the spectrum remain hopeful. On the top floor of the 74M building in Assembly Row, a lounge complete with a shuffleboard table and six Skee-Ball lanes sits next to a yoga studio that overlooks downtown Boston.
Amenities like these in an exciting location have helped the building maintain a steady stream of callers, Greystar’s DeNoble said. With the MGB pathology lease in the bag, he is hopeful about the future.
Time will tell if the more upbeat predictions come true, but optimism for the area is backed by recent evidence. 10 Prospect in Somerville received some welcome good news in late September, when blood cancer biotech Predicta Biosciences announced that it would be moving into a new lab and office space in the building in October. AstraZeneca also garnered headlines on Monday when it officially opened its 570,000-square-foot R&D center in Kendall Square.
Meanwhile, a 498,000-square-foot office and lab building across the street from 74M recently signed the largest-ever life sciences lease in the history of Somerville courtesy of med tech and organ transplant company TransMedics.
“If you zoom in to this Assembly Square cluster, we're very bullish on what this is going to turn out to be,” DeNoble said. “Longer term, there are opportunities for more development here, but right now, with the existing product, we feel good about the momentum.”
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