When it comes to lab space in the Boston area, the costs continue to be on the rise. In fact, a recent report found that Boston and Cambridge are the most expensive life science markets to rent lab space in the entire country.
The Rising Cost of Lab Space
According to a report entitled Life Sciences Outlook released by brokerage JLL, life science rental rates in Greater Boston increased by 7.4 percent to reach an average rate of $47.40 per square foot. In Cambridge, the average rental cost was even higher at $51.60 per square foot with tenants seeking an estimated 1.3 million square feet of space within the city.
Other top markets included:
- South Francisco: up 16.9 percent to $37.30 per square foot
- Los Angeles: up 4.9 percent to $30.70 per square foot
- San Diego: up 15.5 percent to $29.90 per square foot
- New York/New Jersey: up 8.3 percent to $24 per square foot
- North Carolina: up 12.4 percent to $19 per square foot
While most industries would see a mass exodus as tenants look into secondary markets for space, life science firms are determined to find space in these top markets due to the importance of having a strong research and development infrastructure in place. Furthermore, these markets offer the specific labor pools that tenants wish to tap into.
Among the life sciences clusters available throughout the country, the Greater Boston market remains at the top for a number of reasons. Among these is the fact that the market has approximately 17 million square feet of space available. Nonetheless, space in Kendall Square is at a premium with demand outpacing supply at a rate of four to one. Furthermore, finding a single space offering more than 100,000 square feet has become nearly impossible.
Pfizer Offers Opportunities for Space
With the lack of lab space available in the Greater Boston area, a recent announcement by Pfizer that it is willing to sublet 130,000 square feet of space within its two-tower campus located at 610 Main Street has garnered a great deal of attention. For a large biotech or big pharma company looking for a large space within the biotech hub, this announcement offers a great opportunity.
Pfizer’s announcement comes as the company makes plans to consolidate its Cambridge research centers. Under the new plan, the company will move employees from three other buildings to its Main Street research and development center. Ultimately, the building will house approximately 1,000 employees within a 370,000 square foot space. Of the two towers located at the campus, one is already occupied. Pfizer will only fill about half of the other tower with 130,000 square feet of space being available for sub-tenancy in 2017.
Reportedly, Pfizer is already in discussions with potential renters. While Pfizer has declined to name who it is in discussions with, Bristol-Myers Squibb and Baxalta have both recently announced plans to move to the area. Regardless of who takes the space, the location will provide excellent opportunities to take full advantage of the large pool of research and development talent the region has to offer.